August 31, 2025
National Westminster Bank Plc v Morgan [1985] UKHL 2 (07 March 1985)
Mrs Morgan co-signed a mortgage over her home to secure her husband's business loan, advised by the bank manager. She later claimed undue influence. The House of Lords ruled that to set aside a transaction for presumed undue influence, a 'manifest disadvantage' must be proven. Facts Mr and Mrs Morgan were the joint owners of their matrimonial home. Mr Morgan’s business encountered financial difficulties, and a previous lender was seeking possession of the house. To prevent this, National Westminster Bank Plc agreed to provide a short-term bridging loan, conditional upon a legal charge over the home. Mrs Morgan was hesitant
