Contracts Regulation in UK Law

He then made one or two suggestions for limiting her liability, but got the impression that she was indifferent to his suggestions as though she thought it would be a waste of time to put them forward However, while he was still attempting to give his advice to Mrs. Aboody, her husband had burst into the room uninvited and in a high state of excitement.

Mr. O'Brien was, Mrs. O'Brien said, extremely insistent that she should sign. These were heavy family pressures but not particularly unusual nor sufficient, in my opinion, to overset and bear down the will of Mrs. O'Brien. She signed because she was persuaded that it was the right thing to do, not because her husband's pressure deprived her consent of reality.

The difficulty is to establish the relationship between the law as laid down in Morgan and the long standing principle laid down in the abuse of confidence cases viz. the law requires those in a fiduciary position who enter into transactions with those to whom they owe fiduciary duties to establish affirmatively that the transaction was a fair one: see for example Demarara Bauxite Co. Ltd. v. Hubbard [1923] A.C. 673; Moodie v. Cox and Hatt [1917] 2 Ch. 71 and the discussion in the Aboody case, at pp. 962G–964C.

By virtue of it, the English law gives relief to one who, without independent advice, enters into a contract or transfers property for a consideration which is grossly inadequate, when his bargaining power is grievously impaired by reason of his own needs or desires, or by his own ignorance or infirmity, coupled with undue influences or pressures brought to bear on him by or for the benefit of the other.

The bank's legal department is not obliged to commit the professional discourtesy of communicating directly with the solicitor's client and tendering such advice itself. Nor is it obliged to inform the solicitor of his professional duties. This will be a fortiori the case when the documents submitted by the bank to the surety's solicitor contain a certificate that she has been advised of the effect of the document and her right to have independent legal advice.

It is an ordinary incident of a solicitor's duty to explain the obvious potential pitfalls of legal transactions to those about to take part in them, and there is no clear dividing line between explanation and advice. It was no part of the solicitor's duty to advise her not to sign. It was enough if she would receive such advice as would leave her in no doubt of her right to decide whether she was willing in all the circumstances to take a risk which had been explained to her.

Nor do I think that the principle is only applicable in cases where the personal conduct of the fiduciary cannot be criticised. I think that the justice of the individual case must be considered on the facts of that case. Accordingly, where there has been dishonesty or surreptitious dealing or other improper conduct then, as indicated by Lord Denning, it might be appropriate to refuse relief; but that will depend upon the circumstances.