FACULTY OF LAWS LAW OF CONTRACT 2013-2014

DURESS
1 Introduction

Barton v Armstrong (1976) AC 104 (PC) 121 in life many acts are done under pressure, sometimes overwhelming pressure, so that one can say that the actor had no choice but to act. Absence of choice in this sense does not negate consent in law; for this the pressure must be one of a kind which the law does not regard as legitimate. More reasons to set contract aside !uress makes contract voidable "oidable# contract can sometime be set aside "oid# contract does not e$ist from the beginning !octrine of duress has e$panded over the last years %till some parts unanswered. &ften only own opinion on things. 'ormally physical preassure. 'ow newly eg economic preassure (ut more than preassure needed. )reassure must be illegitim te.

Con!ent nd dure!!

*hy do we need to protect people+ Allow them to go back to contract+ (ecause consent needed, -. *ith duress no consent at all. (ecause forced to agree, should be allowed to set contract aside /eg Mckendrick. 0. &thers say, M 1hen2*ishart, Contract Law /0nd edn &3), &$ford 0445. 607f you tell me to hand over 8-4,444 or be horribly maimed, my decision to hand over the money is very real indeed. 7 know what 7 am agreeing to, 7 intend to agree, and 7 very much want to agree. 9he real ob:ection is not that 7 did not consent, but that you induced my agreement by illegitimate pressure. 1ontract aside not because no consent but because way consent was attained was tainted *erent truly free when entering into contract links back to ;reedom of 1ontract 1ase of )ao on vitiating factor of consent Also e$plains why consent is voidable, "oid no consent no contract (39 in !uress, 1ontract voidable because consent was there :ust something wrong with it.

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#$%e! o& Dure!!' !uress to the person !uress to goods >conomic duress

9wo components necessary for duress, 7llegitimate pressure 1ausation link between pressure and formation of contract 4 Dure!! to t(e Per!on 4)1 Illegitim te Pre!!ure

Barton v Armstrong /-?@A. A1 /)1. -4= 1ore case of !uress. )hysical violence 1ompany (arton !irector Armstrong 1harman (oth fought over control of company eventually barton got Armstrong removed as chairman 7nterest had to bought off (arton agrees to do it later refuses to do that because Armstrong 9hreatened to murder him duress ;irst instance, Bes, pressure but main reason for enter in into contract commercial reason. 7llegitimate pressure e$ists but no causation. )rivy 1ouncil, Bes !uress, 9hreat to personCphysical violence # 7llegitimate pressure; Also causation e$ists. (ecause, 1ausation test pro claimant. As long as threat A cause to enter contract enough to show causation. 'o need for it to be the main or sole cause. 4)2 C u! tion

Barton v Armstrong /-?@A. A1 /)1. -4= *7f Armstrongs threats were a reason for (artons e$ecuting the deed he is entitled to relief even though he might well have entered into the contract if Armstrong had uttered no threats to induce him to do so. 7f saying Da causeE almost presuming causation *hy so pro claimant+ 9o set clear rules not to threaten sb. 'o use, dont bother causation easy to find. 3nacceptable behaviour 7n fraudunate misrep, is enough Fust like here, >ven it being a reason enough no need for main or sole reason *orst kind of illegitimate pressure very easy to establish causation

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+ Dure!! to ,ood! ;or long time not e$isted. >$ample, Skeate v Beale /-5=-. -- Ad G > ?56 !uress to goods is not same as to person because to duress to person no free agency. 'o choice but to submit ;ear of goods being taken away does not give you such as pressure as harm to person 9hats where un:ust enrichment steps in, Astley v Reynolds /)awnbroker. /-@6-. 0 %tr ?-H ) pouned his plate to ! for 04 pounds ! later refused to give back instead of -4 pounds interest wanted to pay = pounds no paid -4 pounds later wanted to recover rest over = pounds 1ourt, 1ould reclaim money 7n contract law, 1ontract good cannot reclaim 3n:ust enrichment, Bes reclaim money. 'ow, Bes reclaiming moneyCgoods is valid. !uress to goods is accepted. IeJuirements similar to economic duress >via luck overturns skeate case 6 Economic Dure!! 6)1 E!t -li!(ment o& Economic Dure!! )

&nly recently developed. Occidental Worldwide Investment Corporation v Skibs A/S Avanti ( !e Siboen and t!e Sibotre" K-?@AL - <loyds Iep /1om 1t. 0?6 >stablished >conomic duress #imskal S!ipping Co SA v I W$ ( !e Evia Luck" (%o &" K-??0L 0 A1 -H0 /M<. Mo< confirms e$istence economic duress. 'ao On v La( )i( Long K-?54L A1 A-= /)1. A6H %ince e$pansion of duress some cases that were undue influence cases 6)2 Rel tion!(i% -et.een dure!! nd con!ider tion now maybe duress

Stilk v *yrick /-54?. 0 1amp 6-@ %ome say should have been decided on base of duress. (ut back then duress was not developed enough. !evelopment of duress influenced consideration. ;ormerly had to be strict with consideration in unfair cases not duress to fall back to (oth rules work together work as safeguards for each other. Williams v Ro++ey Bros , %ic!olls (Contractors" Ltd K-??-L - N( - /N(. H-0 /&ten, !uress in case where one party threatens to walk away from contract
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threatens

if not change
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agreement. 7n past, 9his second agreement no consideration contract not valid (ut then *illams v Ioffey, )ractical benefit yes consideration 9hus possible duress to set it aside second contract first contract stays in place 6)" Illegitim te Pre!!ure

*hy so long to develp economic duress because courts dont want to interfere with commercial pressure. Mave to draw a line. ;ine line. ;le$ibility for courts needed for them to perform this D:uggling actE 6)")1 0ore t( n 1u!t commerci l %re!!ure

'ao On v La( )i( Long K-?54L A1 A-= /)1. A6H >$ample where court decided only commercial pressure !s shareholders in company ) threatened to break contract unless ! guarantee for loss ! did it because thought low chance of loss and wanted to avoid publicity. *anted contract set aside for duress 1ourt, 'o. (ecause only commercial pressure not sufficient. ! did not enter contract because of pressure 9wo ways to e$plain, 2 >ither no illegitimate pressure 2 &r causation test negative did not not enter contract because of threat but bc publicity etc. 9ells us, 9wo components A'! need to define pressure, commercial not enough. (ut what is enough+ %ee 3niverse %entinel 1ase Occidental Worldwide Investment Corporation v Skibs A/S Avanti ( !e Siboen and t!e Sibotre" K-?@AL - <loyds Iep /1om 1t. 0?6 6)")2 Unl .&ul Act!

-niverse anks!ips Inc o+ *onrovia v I W$ ( !e -niverse Sentinel" K-?56L - A1 6AA /M<. =4/<ord %carman. 9he origin of the doctrine of duress in threats to life or limb, or to property, suggests strongly that the law regards the threat of unlawful action as illegitimate, whatever the demand. !uress can, of course, e$ist even if the threat is one of lawful action, whether it does so depends upon the nature of the demand. (lackmail is often a demand supported by a threat to do what is lawful, e.g. to report criminal conduct to the police. 7n many cases, therefore, O *hat KoneL has to :ustify is not the threat, but the demand . . .O, see per <ord Atkin in !orne v. *otor rade Association K-?6@L A.1. @?@, 54A. 9hreat to do something unlawful, Penerally illegitimate 7f act that threatened with is lawfull, something else needed

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2 .&ul Act! nd ,ood 3 it(

C % Cas! , Carry Ltd v .alla!er K-??=L = All >I @-= A (urrows, !e Law o+ Restit(tion /0nd edn (utterworths, <ondon 0440. 066 A threatened breach of contract should be regarded as illegitimate if concerned to e$ploit the claimants weakness rather than solving financial or other problems of the defendant. 9o this can be added two supplementary or clarificatory ideas ;irst, a threat should not be considered illegitimate /made in bad faith. if the threat is a reaction to circumstances that almost constitute frustration. And, secondly, if it merely corrects what was always clearly a bad bargain. Ieally what duress is about e$ploitation of other party 1laimants bought cigerettes from ! and ! delivered it to wrong place. Agreed to pick it up and deliver it to right place. (ut in meantime stolen. 'ow ! wanted 1 to pay for it because believed 1 responsible for it /'o legal basisQQ. if not pay no credit anymore /not reJuired to do it anyway. 1oA, <awful for ! not to give credit anymore. 9hey made threat in good faith that money was actually owed to them. 9herefore no !uress here. *hile lawful act can be duress not here. 9hreat with lawful act maybe one more thing needed for it to be duress, (ad faith R v A. +or /ngland and Wales K0446L 3R)1 00 ;or lawfull threat need something additional Member of %A% patrol in war sensitive information after war Ministry of defense doesnt want info to get out %ign secrecy contract I goes back to 'S writes book down Ministry does not want it to be published I says should not be bound to secrecy agreement because was signed under duress. )ressure on him was threat of Dreturn to unitE /#had to go back to unit, less well guarded position, less pay, social e$clusion, usually reserved for disciplinary offences. I says this pressure illegitimate )rivy 1ouncil, 9his is lawful threat. And it is reasonable to ask him to sign and if not put into other part of army. <awful pressure T unreasonable threat # !uress (ut no here. )roblem, 1oncept of unreasonable very vague. *hat is unreasonable+ Maybe combine with bad faith+ Borrelli v ing 04-4 3R)1 0 1hairman of company# also ma:or shareholder of company. 1ompany goes into liJuidation. *ants to go into some kind of scheme need 1hairmans consent. Me blocks consent. >ventually get consent in e$change promise him not to hold him accountable for failure of company. <ater turned out he was responsible for failure of company in the first place. )rivy 1ouncil, 1leary duress. 1hairman used false evidence and opposed scheme for no good reason other than to protect himself. *hilst not unlawful actions Me acted in bad faith and unreasonably. 1ontroversial, (ecause liJuidators claimed duress years after signing contract. 1ontract was already affirmed by that time+ 6)")4
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#(re t! to -re c( t(e contr ct

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%ort! Ocean S!ipping Co Ltd v 0y(ndai Constr(ction Co Ltd ( !e Atlantic Baron" 9hreat to breach contract can be illegitimate pressureQQ 7n that case no duress but principle still there. (ad faith was not discussed. #S#% S(bsea Ltd v 'etrole(m .eo1Services K0444L (<I H64 9hreat to breach contract not held to be illegitimate pressure thus no duress Fudge said, 'eed to look for other factors when threat to breach contract. (ut not clear what case says definitely. !o we really need something more+ Mow interpret this+ 6)4 C u! tion >asy test to satisfy for illegitimate pressure. 1ausation harder #imskal S!ipping Co SA v I W$ ( !e /via L(ck" (%o &" K-??0L 0 A1 -H0 /M<. -AH /a significant cause. )ressure must be significant cause enducing party to enter contract 'ot helpful to thing of cohersion of will need to thing for significant cause More than :ust A cause has to be significant. *hat is significant+ *e dont know. 0(yton SA v 'eter Cremer K-???L - <loyds Iep A04 /1om 1t. A6A /the pressure must have been decisive or clinching. Must be more than a cause has to be significant %ignificant means clinching or desicive. Minimum it has to be a Dbut forE/+. test. *ithout cause wouldnt have entered into contract. Nuite hard test. 'ot enter contract (39 ;&I threat Also, have to allow variations according to specific cases. Migh illegitimacy less strick but for test

2olmar .ro(p A. v a3po /nterprises 'ty Ltd K04-0L >*M1 --6 /1omm. /Dbut forE causation but with fle$ibility. (ut for test is needed %till some room for variations As illegitimacy increases lower but for test. %till need more cases. 'ot clear if but for test is needed 6)4)1 Altern ti4e! or something else+

*as there any other option but to enter in contract+ 1ould he have done anything else+ *ere there alternatives to enterin into agreement+

B,S Contracts and #esigns Ltd v 4ictor .reen '(blications Ltd K-?5=L 71I =-?
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1ontract to put up stands for e$hibiton workers for contractor refuse to do it other than getting paid ?444 pounds 1ontractor offers =H44 no want ?444. %o contractor goes to >$hibitor tells them wants to add =H44 to contractors =H44 contractor no whole ?444. >$. )ay =H44 and promise to pay rest because no choice because close to e$hibition. <ater refuse to and want money back bc duress 1ourt, !efendent no alternative but pay. 9hus duress. Ma:ority of :udges focused on lack of alternatives thus economic duress <ack of alternatives 2 Means that pressure caused them to go into contract Mard to say that illegitimate pressure caused to go into contract when there are many alternatives 7f no alternatives easier to say threat was causation (ut not set. Fust makes it easier to determine. 'ot alwaysQ )roblem, Analysis ofthen hard to put in action on cases, Occidental Worldwide Investment Corporation v Skibs A/S Avanti ( !e Siboen and t!e Sibotre" K-?@AL - <loyds Iep /1om 1t. 0?6 ! said would go bankrupt if not reduce costs 1 agreed because would suffer losses as well. ! lied. 1ourt, only commercial pressure, even though no alternatives *as merely a factor, not the causal reason. >conomic duress ;&3'! in B ,S Contracts and #esigns Ltd v 4ictor .reen '(blications Ltd K-?5=L 71I =-? /1A. 7f victim of threat didnt agree this would have, !amaged its reputation; and, Meant that it would have been liable to e$hibitors.

>conomic duress '&9 ;&3'! in Occidental Worldwide Investment Corporation v Skibs A/S Avanti ( !e Siboen and t!e Sibotre" K-?@AL - <loyds Iep 0?6 /1om 1t. 7f victim of threat didnt agree this would have meant that, 9hey would have to find alternative charterers, and it was unlikely that they could; and, !ue to the insolvency of the charterers, any rights against them would be worthless.

0(yton SA v 'eter Cremer .*b0 , Co K-???L - <loyds Iep A04 /1om 1t. A6A 9he but for test could lead too readily to relief being granted. 7t would not, for e$ample, cater for the obvious possibility that, although the innocent party would never have acted as he did, but for the illegitimate pressure, he nevertheless had a real choice and could, if he had wished, eJually well have resisted the pressure and, for e$ample, pursued alternative legal redress. 6)4)2 3 ctor! rele4 nt to c u! tion

!id the victim,

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Mave a practical alternative, eg, an adeJuate legal remedy; Ieceive independent advice; and, Act promptly to avoid renegotiation.

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