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CTN Cash and Carry v Gallaher

[1994] 4 All ER 714

Case summary last updated at 04/01/2020 17:57 by the Oxbridge Notes in-house law team.

Judgement for the case CTN Cash and Carry v Gallaher

D delivered cigarettes to the wrong warehouse but P agreed to collect them there. They were stolen and D, BF but wrongly believed that the cigarettes were at P’s risk and said that unless P paid, D would withdraw the credit facility that P had enjoyed. P paid the money and then claimed its return since it had paid under duress. CA rejected P’s claim. 

Lord Steyn: The fact that D was in a monopoly position does not convert something which is not duress into duress. D was entitled to refuse future services to P and it was perfectly lawful to do so. Demand for payment + threat to revoke a service is neither a breach of contract nor a tort. It is also “critically important” that D BF believed they were entitled to payment regardless of the threat (even though, in reality, they were not). He says the combination of these three features show that there was no illegitimate pressure (NB evidentiary- he doesn’t say whether it would have been illegitimate, for example, if D had acted mala fide or whether mere “entitlement” to revoke other services is per se legitimate). Merely being lawful does not make something legitimate, otherwise outrageous, but legal, compulsion would not lead to a finding of duress. However, to extend economic duress to cases of BF negotiation would create legal uncertainty. 

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