Lecture notes
Lecture notes Contract Law LLB -duress and undue influence
- Module
- Contract Law LLB
- Institution
- University Of Law (ULaw)
full notes and summary of duress and undue influence - ULaw 2020/21
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Duress- Intro and less complicated forms of duressIntroduction
-Duress involves one party coercing or pressurising the other party into making a contract.
-Duress involves pressure applied by means of an illegitimate threat.
-burden of proving duress is on the party that alleges it
-An express threat is not necessary, the law recognises that a threat can be implicit (B & S
Contracts and Designs Ltd v Victor Green Publications Ltd). And a threat that has been carried
into effect can equally establish duress, such as a contract being signed just after a beating has
taken place.
-Rescission is often used as a remedy, there is no remedy of damages specifically for duress
although in some cases it can be given by way of tortious liability
Duress to the person (barton v armstrong)
-A threat of violence used to coerce or pressure someone into consenting to a contract.
-Barton v Armstrong is the main case and resolves two issues with duress to the person. This
case involved threats of violence and death threats made over the phone.
-So long as the threat was a reason for consenting to the contract then the victim is entitled to
remedy/relief. It does not have to be the sole or main reason. (in this case the victim intended to
do the deed even without the threat).
-This is a relaxation of the general rules of causation and is analogous to the position for
fraudulent representation
-The contract or deed executed was void not merely voidable. ( it is automatically voided, there
is no room for arguing it is not so long as duress is found)
Duress to goods
-The unlawful seizure or detention of the claimants goods (or a threat to do so) can amount to
duress. (Astley v Reynolds)
Economic Duress
Introduction - Definition
-Stupid textbook doesnt have a clear definition of economic duress so need to find one
-Three distinct requirements for economic duress
-Carillion construction ltd v Felix ltd
1-illegitimate pressure or threat
2-Which subjectively caused the victim to act as he did - Was a significant/main cause
3-Which objectively would have caused a reasonable person in the victims position to act in the
same way (i.e there was no realistic/practical alternative course of action)
Illegitimate pressure or threat
-This requirement is about the sort of threat that was made, it must be to do something
illegitimate. Which could be threatening to breach an existing contract
, -However threatening to do something that you are entitled to do (potentially as part of the
contract) is not illegitimate. Huyton SA v Peter Cremer & Co in this case the purchaser refused
to pay for the sellers goods until they were presented with proper shipping documents.
-Threats to breach a contract are not automatically illegitimate (The Siboen and The Sibotre) but
also require it to have been done in bad faith (Atlas Express Ltd v Kafco).In the kafco case atlas
express refused to deliver goods to woolworths’ stores without being paid more money.
-Academic discussion: Burrows (2010) A threat should not be considered illegitimate if
the threatener is merely seeking to correct what was always a clearly bad bargain.
DSND v petroleum geo services, was said that the threatenor was trying to correct a bad
bargain by threatening not to complete work until insurance arrangements were clarified.
The authority of this case is disputed however.
-It has also been suggested that a threat to breach should always count as illegitimate
leaving requirement 2&3 to filter out inappropriate pleas of duress.
Factual causation - Did the threat cause the victim to act as he did (subjective) - Was it a
significant cause
-Relief/Remedies will only be given for economic duress if the threat or pressure was the main
and overwhelming reason why the victim agreed to act or acted as he did (Huyton SA v Peter
Cremer & Co)(Big contrast compared to duress to the person)
-in the Huyton case: ‘ The illegitimate pressure must have been such as actually caused
the making of the agreement, in the sense that it would not otherwise have been made
either at all or, at least, in the terms in which it was made.’
-If the victim was only persuaded to enter because of the combined effect of the threat and other
reasons this will not satisfy the test. The courts used to prefer using the phrasing of ‘coercion of
will’ making it an involuntary act. But now prefers the phrasing in huyton.
-in Pao On v Lau Yiu Long, Lord scarman emphasised four relevant factors involved in this part
of the test.
1. Whether the victim did or did not protest
2. Whether the victim had an alternative course open to him such as an adequate legal
remedy. (therefore he did not have to agree to the act as much as otherwise) - applied in
Atlas v Kafco. This is however probably more a part of test 3.
3. Whether he was independently advised and,
4. Whether after entering the contract he took steps to avoid it.
Objective causation - Would a reasonable person have acted as the victim did? - Was there a
lack of practical choice for the victim
-Advocated by Mance J in Huyton SA v Peter Cremer & Co, and said to be the most important
of the factors in Pao on. That the victim had no other reasonable choice and thus any other
reasonable person would have acted in the same way. Applied in Borrelli v Ting(2010)
-An Example: B & S Contracts and Design Ltd v Victor Green Publishing Ltd, B&S was erecting
a stand at a convention for VG, B&S asked for more money or they would use a force majeure
clause to cancel the contract. Having paid the money as VG had no alternative due to the
convention being imminent they alleged duress. They were successful as the force majeure
clause would not have applied and so the threat was illegitimate.
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