Wednesday, 1 June 2016

THE KAMPALA CITY COUNCIL AUTHORITY ACT(KCCA ACT) GREATLY MODIFIES THE IMPLEMENTATION OF DECENTRALISATION WITH REGARDS TO KAMPALA CITY. ANALYZE THE DIFFERENCES BETWEEN THE KCCA UNDER THE KCCA ACT AND OTHER LOCAL GOVERNMENTS STILL OPERATING UNDER THE LOCAL GOVERNMENT ACT



THE LOCAL GOVERNMENT AND CENTRAL GOVERNMENT IN KAMPALA
Kamarabe john
Student
Ucu law school





























The government system in Uganda is divided between the central government and the local government. Central government is composed of the cabinet[1], public corporations, Tribunal and Police while local government is restricted in specified areas and powers. According to the Concise Law Dictionary[2] to decentralize is to recognize into smaller more autonomous units and to disperse. Decentralisation is the legal administrative and political transfer of power and authority from the center to lower government[3]. The policy was the outcome of series of laws, and commissions’ conferences.
The Local Government Act was enacted in 1987 with a view of affecting the principles of devolution and decentralisation of powers to local government units. The Local Government Act implements the principle that all power belongs to the people as enshrined in the constitution[4]. It also puts in place systems which ensure that people through their duly elected representatives remain in charge of planning, monitoring and execution of all policies. Article 176 of the 1995 constitution of Uganda provides the principles applicable to the local government system. It was enacted in line with Article 206
Before the coming into force of the Kampala City Council Act, Kampala was administered by Kampala city council. In 2010, the Kampala City Council Act 2010 was enacted by the parliament to provide in accordance with Article 5 of the constitution for Kampala as the capital city of Uganda and also to provide for the administration of Kampala by the central government. . The Local Government Act is different from the Kampala City Council Act 2010 because of the following reasons
Differences in the management system.
Under the management system of the local government, there are local government tender boards provided for under Section 91 of the Act. This board is responsible to provide services to the district councils, county council and administrative units pursuant to Section 91 of the Act while in Kampala City Council Act 2010, the board does not exist this has created a question in courts on how one can endorse land transfer in Kampala.

Differences in the composition structure
Section 10 of the LGA provides that the district councils are composed of the district chairperson, one councilor directly elected to represent an electoral area of a district, two councilors, one of whom shall be female youth, excluding the representatives of professional bodies while the Kampala City Council Act 2010 consists on one councilor representing each profession in Section 6 of the Act which include Uganda institution of professional engineers, Uganda society of architects , Uganda medical association and Uganda law society.

Under decentralisation, power is transferred from the central government to the local people. In the local Government Act under section 16, the district executive committee is composed of a large number of executives which include the chairperson, vice chairperson, such number of secretaries, not exceeding vice as the council may determine while the Kampala City Council Act 2010 only consists of one executive who is the executive director[5] to perform a number of functions hence limiting decentralisation. This implies that that the local government act illustrates the large number of participation of the people in decision making than the KCCA Act hence decentralisation
Differences in legislative power
The LGA confers powers to the council in any ordinance to delegate its powers to legislate to a council[6] this delegation principle allows the maximum participation of people in making laws hence decentralisation while, in the Kampala City Council Act, there is no such principle of delegation of powers but only limited to the authority pursuant to section 8 of the Act
Differences in the independence from the central government:
The Kampala City Council Act 2010 expresses that Kampala city is under the control of the central government as illustrated by Article 5(4) of the constitution[7]. This implies that Kampala is still under the administration of the central government since implementations of the authority is done by the central government hence limited decentralisation. However, the LGA is made to ensure that power is transferred from the central government to the local government pursuant to Article 176(2). The councils duly implement, and manage the authority independently without the interference of the central government under section 17 of the Act.
Differences in functions
Under the KCCA Act, during the execution of the Executive Director's functions, he/she makes reports to the council and the minister of state and minister of state and affairs of the city under section 19. This means that the authority is not independent since the accountability is in the hands of the central government while, in the Local Government Act, the chairperson makes the report to the council on the state of affairs of the district under section 13 of the Act. This further shows that the local government is independent of the central government
Differences in the executive powers
Under Article 180 of the constitution of Uganda, the local government has both executive and legislative powers but the executive powers only relate to the formulation and implementation policies under section 17 of the Local Government Act. Section 9 of the Act justifies the jurisdiction of the council in the area in that the council has the highest corporate authority which authority is only limited with in that area of jurisdiction. The local government council does not exercise power beyond his/her geographical area since doing such would be ultra vires. This was confirmed in UGMA ENGINEERING V LUGAZI TOWN COUNCIL[8] where it was held that the local council cannot exercise powers beyond its gazzeted units. Hence the central government authority is limited in the LGA since the executive committee is appointed by the council it’s self. However, in the Kampala City Council Act, the executive director appointed by the central government as the head of the authority under section 19 this was emphasized in the case of Erias Lukwago The Lord Mayor V Jennifer Musisi The Executive Director Misc No 116 Of 2011 where the justice held that the executive director had more power than the lord mayor in the authority. She is vested with power to execute the procurement and disposal process as provided by section 26[9] of the PPDA act and section 19 of Kampala City Council Act 2010 as agreed In Inyatsi Construction Ltd Multi Plex Ltd V Kampala City Council Authority& Executive Director Kampala City Council Authority[10]. The administrative power of the executive director is derived from the president who is the appointing authority. The president is the same authority that removes the executive director from office under sections 17 - 19 of the Act
Differences in accountability.
In the performance of their functions, the chairperson in the Local Government Act is answerable to the district council under Section 13(4) while in the Kampala City Council Act; the lord mayor is answerable to the authority and the Minister (central government) under section 11(2). This implies that in the Local Government Act, the chairperson is independent of the central government hence he makes decisions only with the people but in the Kampala City Council Act, the lord mayor is not independent of the central government since he is answerable to the minister which minister is a member of the central government
Differences in appointment
The executive in the Kampala City Council Act 2010 is appointed by the central government on the advice of the public service commission under section 17(2) while the district executive committee in the LGA is appointed by the district council under Article 186 of the constitution. This means that well as there is decentralisation in the Kampala City Council Authority, there is still central government intervention since the executive director is appointed by the president compared to the Local Government Act where the district council appoints their executive committee independently
Difference in control from the central government.
Under the local Government, the line minister has limited powers to coordinate activities within a particular local Government under Section 95 of the Local Government Act. The minister's mandate is also limited to monitoring and coordinating government policies, advise persons and organizations in relation to projects involving direct relations with the local Government under section 97 of the Act, inspecting and monitoring of local Government under section 98 of the Act but it does not go beyond implementing and managing the authority to ensure that functions, powers and responsibility are devolved and transferred from the government to local Government units under Article 176 (2) of the constitution of Uganda. However, under the Kampala City Council Act, the central government through the Executive Director is given more jurisdiction in the control of the authority by heading the authority and its administration section  19 (a) in conformity with Article (5) 4 of the Constitution of the Republic of Uganda
It can therefore be argued that well as the KCCA under the KCCA Act modifies the system of decentralisation in Uganda, it is still under the control of the central government compared to the local government authority in the Local Government Act which duly justifies decentralization.
BIBLIOGRAPTHY
THE 1995 CONSTITUTION OF UGANDA AS AMENDED
THE KAMPALA CITY COUNCIL AUTHORITY ACT 2010 CAP 281
THE LOCAL GOVERNMENT ACT 1997 CAP 243
THE PUBLIC PROCUREMENT AND DISPOSAL OF PUBLIC
ASSETS ACT, 2003
Decentralisation and transformation of governance in uganda. BY D. ASIIMWE & NOKANYIKE B.M FUNCTION PUBLISHERS KAMPALA

Other sources











QUESTION:              THE  KAMPALA CITY COUNCIL AUTHORITY ACT(KCCA ACT) GREATLY MODIFIES THE IMPLEMENTATION OF DECENTRALISATION WITH REGARDS TO KAMPALA CITY. ANALYZE THE DIFFERENCES BETWEEN THE KCCA UNDER THE KCCA ACT AND OTHER LOCAL GOVERNMENTS STILL OPERATING UNDER THE LOCAL GOVERNMENT ACT


[1] Article 111(1) 1995 constitution Ugandathere shall be a cabinet which shall consist of the president, the vice president, the prime minister and such number of ministers as may appear to the president to be reasonably necessary for the efficient running of the state”.
[2] The concise law dictionary
[3] Decentralisation and transformation of governance in Uganda. By D. Asiimwe & Nokanyike B.M function publishers kampala
[4] Article 1(1) Constitution 1995 Ugandaall power belongs o the people who shall exercise its sovereignty in accordance with this constitution”
[5] section 17 of the KCCA Act 2010
[6] section 38 (6) Local Government Act
[7]The territory boundary of Buganda shall be the capital city of Uganda and shall be administered by the central government
[8] Ugma Engineering v Lugazi Town Council Civil appeal no 33 of 1990
[9] The accounting officer of a procuring and disposing entity shall have  shall have overall responsibility for execution of the procurement ……..
[10] Inyatsi Construction Ltd Multi Plex Ltd V Kampala City Council Authority& Executive Director Kampala City Council Authority Miscellaneous Application No 290 of 2013

VITIATING FACTORS BY KAMARABE JOHN



THE ANALYSIS OF THE LAW ON VITIATING FACTORS.











KAMARABE JOHN
STUDENT
UGANDA CHRISTIAN UNIVERSITY LAW SCHOOL





TABLE OF CONTENTS
Introduction
Mistake
Misrepresentation
Undue influence
Frustration
Duress
Conclusion








Introduction
A vitiating factor is a condition that will render an otherwise valid contract invalid.
Mistake.
A mistake is an erroneous belief of fact by the parties to a contract concerning a matter of a contract very essential to a contract. A mistake will operate to either nullify consent or negative consent. A mistake operating to negative consent is an erroneous belief by the parties to a contract concerning a matter very essential to a contract, which will operate to prevent the parties from reaching an agreement.
A mistake operating to nullify consent is an erroneous belief by the parties to a contract concerning a matter very essential to a contract in which parties reach an agreement but under a fundamentally mistaken assumption.
Types of mistake
Common mistake.
This is a form of mistake where both parties to a contract are under the same erroneous belief concerning a matter very essential to the contract. This form of mistake is one which will operate to nullify consent. For example; mistake as to existence of the subject matter, mistake as to identity of the subject matter, mistake as to quality of the subject matter, mistake as to the possibility of performing the contract, mistake as to quantity.
Mistake as to the existence of the subject matter.
This is an erroneous belief by both parties to the contract concerning the existence of the subject matter. In this form of mistake, both parties to the contract have an erroneous belief that the subject matter of the contract exists yet it actually does not exist. To this end, their consent is nullified. For example, where parties contract to sell a good, and without the fault of any party to the contract, the goods had already perished. See section 7 Sale of Goods Act Cap 87, Couturier v Hastie [1852] 8 Exch.40 In this case, there existed a contract to sell corn f.o.b., before the time of sale, unknown to the parties the cargo had become overheated and sold out. Court held that the contract was void.
Mistake as to the identity of the subject matter.
This is an erroneous belief by both parties to the contract concerning the identity of the subject matter they are contracting for. In this form of mistake, both parties think they are dealing with one thing yet actually they are dealing with another thing. This will nullify consent. So, mistake as to identity of the subject matter will nullify consent where the parties are under an erroneous belief in which they both think they are dealing with one item yet infact they are dealing with another item.
Mistake as to possibility of performing a contract.
This is a an erroneous belief by both parties to a contract in which they both believe that the contract is capable of being performed yet infact that is not the case. forexample;
·         Physical impossibility.
·         Legal impossibility
·         Commercial impossibility

Unilateral mistake;
This is an erroneous belief by only one party to the agreement concerning the subject matter or a term very essential to the contract. In my opinion, it would appear that this type of mistake is that of Section 17(2) of the Contracts Act, 2010 that provides, “A contract is void where one of the parties to it operates under a mistake as to a matter of fact essential to the contract.” In this type of mistake, it is only one party to the contract that is under a mistake as to the subject matter of the contract. For example a mistake as to identity of the contracting party. In Lewis V Averay [1971] 3 All E.R. It was held that the fact that a party is mistaken as to the identity of the other party to the contract does not render the contract void but it becomes voidable at the option of the mistaken party provides there exists no third parties that have taken up rights over such contracts. In that case, Lord Denning had this to say,
 In Ingram v Little the majority of the court suggested that the difference between Phillips v Brooks and Ingram v Little was that in Phillips v Brooks the contract of sale was concluded (so as to pass the property to the rogue) before the rogue made the fraudulent misrepresentation (See [1960] 3 All ER at 337, 343, [1961] 1 QB at 51, 60), whereas in Ingram v Little the rogue made the fraudulent misrepresentation before the contract was concluded. My own view is that in each case the property in the goods dwid not pass until the seller let the rogue have the goods. Again, it has been suggested that a mistake as to the identity of a person is one thing; and a mistake as to his attributes is another. A mistake as to identity, it is said, avoids a contract; whereas a mistake as to attributes does not. But this is a distinction without a difference. A man’s very name is one of his attributes. It is also a key to his identity. If then, he gives a false name, is it a mistake as to his identity? or a mistake as to his attributes? These fine distinctions do no good to the law. As I listened to the argument in this case, I felt it wrong that an innocent purchaser (who knew nothing of what passed between the seller and the rogue) should have his title depend on such refinements. After all, he has acted with complete circumspection and in entire good faith; whereas it was the seller who let the rogue have the goods and thus enabled him to commit the fraud. I do not, therefore, accept the theory that a mistake as to identity renders a contract void. I think the true principle is that which underlies the decision of this court in King’s Norton Metal Co Ltd v Eldridge, Merrett & Co Ltd and of Horridge J in Phillips v Brooks Ltd, which has stood for these last 50 years. It is this: when two parties have come to a contract—or rather what appears, on the face of it, to be a contract—the fact that one party is mistaken as to the identity of the other does not mean that there is no contract, or that the contract is a nullity and void from the beginning. It only means that the contract is voidable, that is, liable to be set aside at the instance of the mistaken person, so long as he does so before third parties have in good faith acquired rights under it

It therefore follows that the principle in the case of Lewis V Averay is, when parties come in to a contract, the mere fact that one party to a contract is mistaken as to the identity of the other party, the contract in not void but becomes voidable at the option of the party mistaken provided he does that before third parties have in good faith acquired rights under the contract.
Whether or not this principle can be reconciled with Uganda is a question of dispute that I would appeal to you that you ask your lecturers. This is because, the principle states that a mistake as to identity renders the contract voidable but not void. However, Section 17 of the Contracts Act states that a mistake of any fact essential to the contract renders the contract void and not voidable. In my opinion, if the identity of the contracting party was essential to the contract, then the contract is void and not voidable . if follows, in my opinion, that the principle in Averay case is absolutely wrong.



A mutual mistake
This is an erroneous belief by both parties to a contract concerning a subject matter of the contract in which both parties are at cross purpose with each other. This is a type of mistake in which both parties to a contract are at cross-purpose with each other concerning a matter material to the contract.
Mistake as to quality of thing contracted for.
A mistake as to quality of the thing contracted for will invalid a contract only if the quality of the goods contracted for formed part of the contractual description of the goods. If the quality of the thing contracted for did not form the contractual description of the thing contracted for, there will be no mistake and the contract will not be set aside only on that ground. In Bell V Lever Brothers [1931] ALL E.R. 1 it was held;
 A mistake to quality of a thing contracted for will not affect the assent of the party unless it is a mistake on both the parties to the contract and is a mistake as to the existence of the quality which makes the thing without the quality essentially different from the thing as it is believed to be”.
Ingredients necessary to establish a mistake
·         The mistake must be of a matter of fact. The courts will not render a mistake as to expectation as a mistake of fact, the mistake must be as to existing facts as to the date the contract was formed and not as to future expectations. See Amalgamated Investment & Property Co. V. John Walker [1977] 1 W.L.R. 164
·         The matter of fact must be essential to the agreement.
·         The mistake must induce the party mistaken to enter in to the contract, this means that the mistaken party must have relied on the mistake to enter into the contract.
·         The mistake must be operative. This means that the mistake must be serious enough to render the contract void.
THE DOCTRINE OF NON-EST FACTUM
This doctrine simple means, “Not my deed” meaning that the person disputes the fact that he signed the document alleged that he signed. The general rule is that except where there is a misrepresentation, mistake or fraud, etc, a person who signed a document must be bound by it and must not be heard saying that he did not sign it.
Requirements
There pleader of non est fuctum must show he signed the document by mistake
The mistake was a serious mistake as to the contents of the document, if the person pleads non est factum over a matter which is not serious, the plea fail. For example, you cannot raise a plea over a document you intended to operate as something but it later operates through something else but it achieves the aim you wanted it to achieve.  See Gallie  V Lee [1969] Ch.1 the mistake forming non es fuctum must be sufficiently serious.
It was induced by the other party. If the mistake was induced by the plaintiff’s own negligence, then the plea will not succeed. For example, where the plaintiff does not understand the language of the document but does not labor to have the document translated to him. See Kakande V Nsimbi [1984] H.C.B.37
                                                            MISREPRESENTATION
a misrepresentation is an untrue statement of material fact made by a party to a contract at the time or before entering into a contract to another party to a contract with intention that it induces that other party to enter into a contract.
The effect of a misrepresentation to a contract.
·         The general rule is that a misrepresentation makes a contract voidable at the option of the representee and not void. The contract is voidable and not void.
·         The contract is voidable at the option of the party misrepresented
·         The party misrepresented may if it thinks fit insist that the contract is performed and put back to the position it would be in if it had not been misrepresented
Section 16 Contracts Act, 2010 Laws of Uganda

The difference between the effect of a mistake to a contract and misrepresentation.
A mistake renders a contract void while a misrepresentation makes a contract voidable and not void.
Where a mistake has affected a contract, and a third party has gained rights from that contract, the party under the mistake can regain his goods from the third party because property did not pass to the third party. However, when a third innocent third party acquires goods under a contract voidable for misrepresentation, property passes to him and the other party cannot regain his property from such a contract.
For a misrepresentation to suffice, the following must be proved,
·         There must have been made an untrue statement of fact and not of opinion
·         The untrue statement must be of a material fact to the contract
·         The untrue statement must have been made by the defendant with the intention to induce the plaintiff to enter into the contract
·         The plaintiff must have been induced to enter into the contract by the untrue statement by relying on it
·         The plaintiff must have suffered damages as a result of an untrue statement.
The conduct of the defendant may also amount to a misrepresentation. silence does not amount to a misrepresentation. Examples of misrepresentations include, a seller of a ship takes the ship into the water to conceal its rotten hull, the seller of a gun inserts a plug to conceal a weak spot in the gun’s workmanship, and the conduct must be of a positive act to amount to a misrepresentation. This simply means that the defendant must do an act to amount to a misrepresentation. Mere silence does not amount to a misrepresentation. See Keates V Lord Cadogan (1851) 10 C.B. There must be some positive statement, or some conduct from which a statement can be implied, or in order to amount to a misrepresentation. With regard to conduct, a nod or a wink or a shake of the head or a smile may suffice. See Walters V Morgan (1861)3 De GF J 718, R V Charles [1977] AC 177 as may a photograph. See Atlantic Estates Plc v Ezekiel [1991] 2 EGLR 202. It has been held that the participation b the spice girls in the making a commercial to be shown in the future constituted a misrepresentation by conduct that none of the group had an existing intention to leave the group before it was shown[1].

Negligent Misrepresentation
This is an untrue statement of fact made by a party to a contract carelessly or recklessly in breach of a duty of care owed by the party to another with intention to induce the party to enter into the contract.
·         There must be an untrue statement of fact
·         The statement must have been made by the defendant intending to induce the other party to enter into the contract
·         There must be a duty of care of care owed by the defendant to the plaintiff by taking up a responsibility which is breached
·         The statement must have been made recklessly or negligently by the defendant without care whether it is true or not
·         The statement must have induced the contract
·         Damage as result of the reliance on the statement
Hedley Byrne & Co.Ltd V Heller & Partners Ltd [1963] 2 All E.R. 575
It was held that:
“there need not be a contract subsisting between parties for there to be a breach of duty of care giving rise to negligent misrepresentation. That as long as a party has taken up a responsibility towards another, then a duty to take care arises”
Fraudulent Misrepresentation
This is a false statement of material fact made by a party to a contract knowing of its falsity, without believe of its truth, reckless not caring whether it is true or false with intention of inducing the other party to enter into a contract.
·         There must be a false statement of fact made by the defendant
·         The defendant must be aware of its falsity or without believe that its true,
·         The defendant must have made it with intention of inducing the other party to enter into contract
·         The plaintiff must have been induced to enter into the contract by the statement by relying on it
·         Damage as result from the false statement
Derry v Peek (1889) 14 App. Cas.685
To maintain an action of fraudulent misrepresentation, it must be proved that there was a false statement made by the defendant who was aware of its falsity.
To support an action of deceit, fraud must be proved and that nothing less than fraud will do. Fraud can be proved by showing that a false statement was made by a person who had knowledge of its falsity with intention to induce another to enter into the contract.
Accordingly, see Section 15 of the Contracts Act, 2010 Laws of Uganda
Innocent Misrepresentation
This is an untrue statement of material fact made by a party to a contract without fault on his party reasonably believing it to be true intending to induce the other party to enter into the contract.
Remedies for misrepresentation
Rescission. This is the setting aside of a contract to restore the state of things as they were before the contract was entered into. When a party rescinds for misrepresentation for breach, the party can set aside the contract and claim damages for breach, but where the party only rescinds the contract on misrepresentation, the party only sets aside the contract and cannot claim damages.
When misrepresentation can be raised as a defence.
Misrepresentation can be raised as a defence for an action of specific performance. When a party is sued under specific performance, he can plead misrepresentation in order to rescind the contract and avoid performing it.


Loss of rights to rescind.
Lapse of time, affirmation, benefit to the representee only if the representor was put to an expense in conferring a right to the representee, third party rights,
Partial Non-disclosure and active concealment.
The general rule is that there is no duty on the contracting party to disclose material facts known to him and not to the other party. To this end, a landlord is not liable under deceit from failing to inform a tenant before leasing the house to him that it is in bad condition. However, if a party lies, this amounts to a misrepresentation. The doctrine is that of caveat emptor.
Caveat emptor.
This is a principle under contract law that a party to a contract must be aware of some information material to the contract necessary so as to avoid making a bad bargain. In Smith V Hughes (1871) it was stated. “There is no legal obligation in a vendor to inform the purchaser that the other is under a mistake if the vendor did not induce the mistake”
Latent defect.
A latent defect is a fault in a property that would not be easily visible at the time of contract without thorough inspection. The general rule is that there is no duty upon the vendor to disclose latent defects. There is no general duty to disclose latent defects known by the seller.
A partial non-disclosure may constitute a misrepresentation. Suppression of material facts can render that which is stated false as where the seller of land told the buyer that the land had recently been occupied at a particular rent (which was true) but omitted to inform him that more recently he failed to find a new tenant except at a lower rent, which therefore gave a wrong impression that the land still had the higher value. See Dimmock v Hallet (1866) LR 2 Ch. App 21
Exceptions to caveat emptor.
Where there exists events that have falsified previous statements made by the party before the contract is concluded.
Where there exists a custom not known by the other party but known by the party to which the contract is subject to.
Where the contract is that of uberimmae fidei. This is a contract of at most good faith. There is a duty to disclose in contracts where the party is in stronger position to know the material facts and the other is in weak position. E.g. Insurance contracts.
Statements literally true but misleading.

UNDUE INFLUENCE AND DURESS
DURESS
Duress is an illegitimate form of pressure, violence or threat by one party to a contract to the other party made with an intention of inducing the other party to enter into a contract. Distress[duress] is the coercion of the will of one party to the contract by another party to the contract so as to vitiate consent of the coerced party. See   Pao On v Lau Yiu Long [1979] 3 All ER 65 Section 13 Of The Contracts Act provides, consent of parties to a contract is taken to be free where it is not caused by coercion.
Ingredients of Duress:
·         There must be threats whether actual or not, violence.
·         The threats must be unlawful
·         There must have been no reasonable alternatives for the coerced party to avoid the threats. For example, if the party had an alternative to sue on the threats, he cannot plead duress. See Hennesy V Craigmyle [1986] 1 C.R.461.
·         They must have been made by the other party to the contract with intention to induce the coerced party into the contract
·         The coerced party must have relied on the threats to enter into the contract.


UNDUE INFLUENCE.
This is the improper use of power by a person in a way that deprives of another’s free will and substitutes it with the other’s objective[2]. This is the unfair use of position by a party to a contract who stands in a dominant position over the other party to dominate the will of that other party and infact dominates the will of that other party to his advantage.
Types of undue influence;
·         Actual undue influence
·         Presumed undue influence.
Actual undue influence:  This is the type of undue influence where one party who is in a dominant position to dominate the will of the other party directly uses that position by directly putting pressure on the other party to obtain an unfair advantage.
Ingredients of actual undue influence
·         The party must show the existence an influence.
·         The exercise of that influence by the other party unfairly.
·          The contract was entered into by the influence.
·         That the contract was to his disadvantage.
See: Bank of Credit & Commerce International S.A. V. Aboody [1990] 1 Q.B.923
Presumed undue influence: This is the type of undue influence where a party in a pre existing relationship with another party in which court can infer would dominate the will of the other party and infact dominates the will of the other party to its disadvantage. In this category of undue influence, because of a pre existing relationship between the parties to a contract, court would infer that the other party in a dominant position to the other would use that position to dominate the will of the other party and infact used that position to dominate the will of the weaker party to its disadvantage. If the agreement on the face of it appears to court to be unconscionable [an agreement, which no promisor without any delusions would make, or no honest and fair promisee would accept], the burden will shift to the party in the dominant position to show that it did not dominate the will of the weaker party.
Ingredients for presumed undue influence
Where a party to an agreement raises undue influence, and of the face of the agreement or the evidence available it appears to court that the agreement is unconscionable, the burden of proof is the party that is presumed to be in a dominant position to show it did not dominate the will of the other party.
The ingredients are,
·         There exists a pre existing relationship between the parties in which court can infer undue influence
·         The defendant was in a dominant position to dominate the will of the plaintiff who was in a weaker position
·         The defendant dominated the will of the plaintiff to its disadvantage. Whether the contract was disadvantageous will be determined by looking at the contract itself and weighing the advantages with the disadvantages of the contract. If court determines that the contract’s advantages are more for the other party and the disadvantages to the opposite party, then it will be disadvantageous.
·         The contract was entered into as a consequence of the undue influence.
The burden on the plaintiff is to show that there existed  a necessary relationship and ounce that burden is established, the defendant must rebut the presumption on undue influence by showing that the plaintiff entered the contract  in the free exercise of his independent will.eg, showing that the plaintiff had independent advice from a competent adviser basing on the facts relevant to the case.
See: National Westminster Bank Plc V Morgan [1985] A.C. 686

Relationships in which courts will presume undue influence.
Undue influence may be presumed where there is a pre-existing relationship of confidence between the two parties to a contract, as a result of which one places trust in the other, and the contract between them is manifestly disadvantageous to the party who places trust in the other. Such a relationship of trust is called a fiduciary relationship, and it may arise in two ways. First, it may fall into one of several categories in which a relationship of trust is automatically presumed to exist. These categories are:
Parent and child;
Religious adviser and disciple;
Guardian and ward;
Solicitor and client;
Trustee and beneficiary; and
Doctor and patient.
Unconscionable bargains.
See Lloyds Bank v Bundy [1974] 3 ALL E.R. 757
The contract can be set aside on grounds of being an unconscionable bargain. This is because the shopkeeper unconscionably obtained an advantage from the poor old woman by charging her a gross valued consideration. He was in a stronger position to dominate the will of the poor woman and infact dominated her will by charging her a gross valued consideration.
EXAMPLES
·         catching bargains.
These are contracts between two or more parties where one of the parties is under an anticipation of an expectation. For example, an expectant heir.
·         Dealing with poor and elderly persons.
Equity will set aside a contract where an unfair advantage has been obtained from a poor, old, ignorant person, weak-minded etc. if the poor did not have independent advice
The principle in Alkard v Skinner by lord lindley.
The principle of undue influence is to save people from being victimized by other people. That courts of equity have never set aside a gift on grounds of imprudence or lack of foresight by the donors.
                                                           ILLEGALITY:
PRINCIPLES.
Pari Delicto; This simply means that courts will not enforce a claim by one party as against another if both parties to the claim are at fault.
in aequali jure (melior est conditio possidentis).  This simply means that courts will not enforce a claim by one party as against the other party if neither party to the claim is at fault.
Nemo auditur propriam turpitudinem allegans. This means that no party can be heard who invokes his own guilt.
Pari causa turpitudinis cessat repetitio. Where both parties are guilty, no one can recover.
A severance clause; This is a statement in the contract which states that where there is an offending statement in the contract which would otherwise hold the contract illegal, the offending statement should be removed from the contract so long as the removal of the offending statement does not impair the validity of the contract. This is also known as the Pencil Rule
Solus agreement. This is an agreement by a party to bind itself to buying its supplies from only one specified party.
Public interest. This is the general welfare of the public that warrants recognition and protection
Public Interest exception. This is the principle that courts may never the less hear and determine a moot case although such decisions are generally prohibited.
A contract to restrain business competition is unenforceable however if the contract is to restrain an employee from using his employers’ confidential information is enforceable as long as the restrain is limited to that purpose.
Distinction between a void contract and an illegal contract
A void contract is one which a statute sets out formalities required for its validity but does not set out a penalty for non-compliance while an illegal contract is one in which the statute sets out the formalities required for its validity and sets out the penalty for non compliance. 
Examples of void contracts.
·         Employment agreements that that preclude the application of the Employment Act
·         Agreements entered into by mistake
·         Agreements in restraint of trade unless the restraint is reasonable in respect of protecting the interest of the parties concerned and the public interest,
·         Agreements to do impossible acts
·         Contracts restricting personal liberty
·         Wagers. This is a promise to pay money or any consideration on the occurrence of uncertain event.
Examples of illegal contracts
·         Suicide pacts
·         Sale of noxious drugs
·         Sale of adulterated drugs
·         Sale of tobacco to persons below 21 years

Examples of voidable contracts
·         Contracts entered into by misrepresentation
·         Contracts entered into by fraud, coercion, undue influence.
Effects of an illegal contract to third parties
The third party can recover property transferred under an illegal contract provided the third party did not participate in the contract.


[1] Spice girls ltd v Apiilia World Service [2000] EMLR 478
[2][2] The Black’s Law Dictionary, 8th Edition.