What does "undue influence" refer to in contract law?

"Undue influence" in contract law refers to a situation where one party exerts excessive pressure or influence over another party, leading them to enter into a contract that they might not have otherwise agreed to. This concept is rooted in the idea that there is an imbalance of power or trust in the relationship between the parties involved, often due to factors such as age, health, or psychological state.

In instances of undue influence, the influenced party may not be making a decision based on their free will; instead, they are acting under pressure from the influencing party. This can lead to the contract being voidable, meaning that the affected party can challenge the validity of the contract in legal settings.

This concept is distinct from mutual agreement, which emphasizes a balanced and fair decision-making process between parties. It also differs significantly from providing incentives, which typically suggests a voluntary willingness to enter the contract rather than a coercive situation. Promises made without consideration refer to a different legal issue, relating to the enforceability of agreements without reciprocal value. Each of these other concepts does not encapsulate the coercive nature and the imbalanced power dynamics that characterize undue influence.