y session topic was the doctrine of economic duress in todays business and commercial contracts, and how it has

been applied in various jurisdictions. Duress is the inducement of a transaction in which one party exercises a degree of illegal domination on the other, to obtain and derive undue benefits. The earliest form of legally recognised duress is duress to the person. On this, the ruling authority is a 1973 Privy Council decision, in which a land deal was induced following murder threats to the victims family members. The progression to duress of goods is inevitablewhere the party in possession does not release the goods and arm-twists the owner to agree to his terms. The essence of the detention has to be illegitimate, there being various forms of lawful detention. Complexities in commercial transactions have led to the emergence of the concept of economic duress as a separate doctrinethat illegal pressure can be brought to bear on a party, without actually holding a gun to his head. Certain laws, such as anti-trust and consumer protection, have been strengthened to protect vulnerable parties. That apart, courts are also setting aside contracts vitiated by unlawful pressure. The problem lies in distinguishing between unacceptable commercial pressure, from the ordinary rough and tumble of the marketplace. The concept of duress finds place in the Indian Contract Act, 1872. Defined in Section 15, it recognises the concept of duress to goods as well, though its languages indicate limitation to criminal acts forbidden under the Indian Penal Code. Section 72 is more relevant to economic duress, providing that no person shall unjustly enrich himself at the expense of the other, and recognising the relief for restitution, where such enrichment is the consequence of coercion. The question is if Section 72 is subordinated to 15, and to what effect? The Privy Council, in Kanhaiya Lal vs National Bank of India, held that the term coercion used in Section 72, is not controlled by the Section 15 definition and must be used in its general and ordinary sense. Further decisions of the Indian courts have provided parameters for determination of economic duress e.g. actual or threatened pressure against which the victim registers protest. In pleading economic duress, a party must also have had no reasonable alternative to the action it seeks to set aside i.e., agreeing to the oppressive contract. If reasonable alternative was available, there cannot be any no choice situation. A person so threatened, therefore, can have the contract declared unenforceable for operative duress and also claim damages in a separate action for tort. Certain Commonwealth jurisdictions like the UK, Australia and Singapore have been pro-active in applying the doctrine to commercial contracts. Civil law countries have been more cautious and subjective in this regard, where the concern is on the impact the duress would have in vitiating the contract terms. Courts here have applied the doctrine sparingly, and more in relation to employee related contracts, or patently unequal non-compete and similar restrictive covenants. The reason perhaps is that in Indias liberalised business and legal environment, the courts perceive difficulty in defining inequality on a holistic analysis, without appearing to be jingoistic and biased. Indian courts are, perhaps, trying to undo the judicial activism of the 70s and 80s, in inevitably backing the underdog. There is a change in attitude in exercise of discretion. An example we often face in negotiating cross-border contracts are the dispute resolution, jurisdiction and governing law clauses being imposed unilaterally by the stronger party. The

other party takes its call based on commercial expediency. Is he entitled to challenge it later, on economic duress? Its safe to predict that Indian courts will decline such a plea. Courts these days are more inclined to enforce contracts, rather than setting them aside, to provide the stability and support the judiciary is required to.