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CTN Cash and Carry v Gallaher [1994] 4 All ER 714

By Oxbridge Law TeamUpdated 04/01/2024 07:00

Judgement for the case CTN Cash and Carry v Gallaher

Table Of Contents

  • Defendant delivered cigarettes to the wrong warehouse but Plaintiff agreed to collect them there.

  • They were stolen and Defendant, BF but wrongly believed that the cigarettes were at Plaintiff’s risk and said that unless Plaintiff paid, Defendant would withdraw the credit facility that Plaintiff had enjoyed.

  • Plaintiff paid the money and then claimed its return since it had paid under duress.

  • CA rejected Plaintiff’s claim. 

Lord Steyn

  • The fact that Defendant was in a monopoly position does not convert something which is not duress into duress. Defendant was entitled to refuse future services to Plaintiff 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 Defendant 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 Defendant 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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