When is undue influence most likely to arise?

Undue influence most often arises when there is a special relationship between the influencer and the influencee. This type of relationship can create a power imbalance where one party has significantly more authority or influence over the other. Such relationships can be familial, fiduciary, or involve a caregiver and a dependent, among others. The dynamic allows the influencer to potentially exploit their position to induce the influencee to make decisions or enter into contracts that they might not otherwise have agreed to, often without fully understanding the implications or consequences of those decisions.

In situations where the parties are on more equal footing, such as during negotiations between equal parties, the likelihood of undue influence diminishes considerably. Additionally, while contracts involving large sums of money may heighten scrutiny regarding the fairness and validity of agreements, this factor alone does not inherently increase the risk of undue influence without the presence of a specific power dynamic. Public contracts also do not typically foster the type of intimate influence seen in personal or fiduciary relationships where undue influence is most likely to occur. Therefore, the presence of a special relationship is critical in establishing the conditions under which undue influence can manifest.