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Summary Duress, Undue Influence and Inequality of Bargaining Power
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Duress, inequality and undue influence are considered. Impact it has on the viability of a contract.
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Chapter 17Duress, undue influence and inequality of bargaining power
17.1 Introduction:
Law of contract has always placed limits upon the exercise of economic power by
contracting parties.
This role has traditionally been played by the doctrines of duress and undue influence, in
recent years there have been attempts to introduce into the common law a doctrine of
inequality of bargaining power.
17.2 Common law duress:
Relatively a late developer in English contract law.
Courts as having difficulty in recognising the existence of more subtle forms of duress, such
as duress to goods and economic duress.
Historically, some of the work was done by the doctrine of consideration.
The role of consideration in regulating duress-type situations is likely to diminish still further
as result of the CA decision in Williams v Roffey Bros.
Modern courts as willing to find the presence of consideration in the renegotiation of a
contract and leave it to duress to regulate the fairness of the renegotiation.
Difficulty is that duress has been bedevilled by conceptual confusion, with the results that it
is not easy to identify its limits and isn’t obvious that it is ready to play the role which has
been allocated to it.
3 types of duress at common law:
1. Least controversial= duress to the person. May consist of actual violence or threats
of violence. Barton v Armstrong [1976] -> PC held that the threats need not be the
sole reason for entry into the contract; it was sufficient that the threats were a
factor influencing the victim to enter into the contract.
2. Duress to goods-> threat of damage to the V’s goods rather than to his person.
Development of the law as hindered by Skeate v Beale [1840] -> was held that the
unlawful detention of another’s goods doesn’t constitute duress. There was
authority for the proposition that money paid to resale goods which had been
unlawfully detained could be recovered back in an action for money had and
received (Astley v Reynolds [1731]). In the Siboen and The Sibotre [1976] Kerr J
refused to follow Skeate.
3. Most difficult to stabilise= economic duress. Arises where one party uses his
superior economic power in an ‘illegitimate way’ so as to coerce the other
contracting party to agree to a particular set of terms. Existence of doctrine as
founded in The Siboen and The Sibotre by Kerr J and affirmed in R v A-G for England
and Wales [2003]. Hoffman-> two elements to the ‘wrong of duress’. 1. Pressure
amounting to compulsion of the will of the victim. 2. The illegitimacy of the pressure.
Each element requires separate consideration.
Hoffman-> first element is ‘compulsion of the will of the victim’-> traditional formula= there
must have been a ‘coercion of the will’ of the victim which was such as to ‘vitiate’ his
consent.
Coercion of the will theory as apparent in The Siboen and The Sibotre.
Atiyah; difficulties in the theory.
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