Royal Bank of Scotland v Etridge (No 2)
2001 · [2001] UKHL 44, [2002] 2 AC 773
Posted By lanbuk.com
- Facts
- Eight appeals in which wives charged their homes to secure their husbands' business debts, and later said they had been influenced by their husbands.
- Issue
- When is proved, and when is a lender affected by it?
- Held
- The House of Lords explained that the claimant must show and confidence and a transaction calling for explanation. A lender is put on inquiry whenever a wife stands surety for her husband's debts, and must take reasonable steps to ensure she has independent legal advice.
- Principle
- Undue influence rests on abuse of trust. A lender who follows the Etridge steps is protected.
- Why it matters
- It is the modern leading case on undue influence and surety wives.
Words and Latin in this note
- Undue influence
- Pressure that takes away a free choice, usually where one person trusts another and the transaction calls for an explanation. The transaction can be set aside. Open the note.
- Trust
- An arrangement in which a trustee holds property at law but must use it for beneficiaries, or for a charitable purpose. The beneficiaries have the equitable interest. Open the note.
For study only. By lanbuk.com. Always check current sources and consult a qualified professional.