im because not given with due knowledge, or, if he is in a
relation of dependence to the other party, with independent judgment.
Inducing a man by deceit to enter into a contract may always be treated
by the deceived party as a ground for avoiding his obligation, if he
does so within a reasonable time after discovering the truth, and, in
particular, before any innocent third person has acquired rights for
value on the faith of the contract (see FRAUD). Coercion would be
treated on principle in the same way as fraud, but such cases hardly
occur in modern times. There is a kind of moral domination, however,
which our courts watch with the utmost jealousy, and repress under the
name of "undue influence" when it is used to obtain pecuniary advantage.
Persons in a position of legal or practical authority--guardians,
confidential advisers, spiritual directors, and the like--must not abuse
their authority for selfish ends. They are not forbidden to take
benefits from those who depend on them or put their trust in them; but
if they do, and the givers repent of their bounty, the whole burden of
proof is on the takers to show that the gift was in the first instance
made freely and with understanding. Large voluntary gifts or beneficial
contracts, outside the limits within which natural affection and common
practice justify them, are indeed not encouraged in any system of
civilized law. Professional money lenders were formerly checked by the
usury law: since those laws were repealed in 1854, courts and juries
have shown a certain astuteness in applying the rules of law as to fraud
and undue influence--the latter with certain special features--to
transactions with needy "expectant heirs" and other improvident persons
which seem on the whole unconscionable. The Money Lenders Act of 1900
has fixed and (as finally interpreted by the House of Lords) also
sharpened these developments. In the case of both fraud and undue
influence, the person entitled to avoid a contract may, if so advised,
ratify it afterwards; and ratification, if made with full knowledge and
free judgment, is irrevocable. A contract made with a person deprived by
unsound mind or intoxication of the capacity to form a rational judgment
is on the same footing as a contract obtained by fraud, if the want of
capacity is apparent to the other party.

Misrepresentation.

There are many cases in which a statement made by one party to the other
about a material fact will