D was contracted to build a tanker for P for a price in dollars that was not to change. When the dollar devalued, D demanded that a higher price be paid to compensate and threatened to terminate unless P agreed. P paid and then tried to reclaim the money due to economic duress. Mocatta J held that there was duress, BUT that P couldn’t reclaim the money because, in paying the final instalments later on without protest and in making a big delay in their claim for payments, they had actually affirmed the contract.
Mocatta J: The approach to economic duress is to see if the principles fit, NOT to reason by analogy or see if the case falls within previously established categories. A threat to break a contract MAY = economic duress in the right circumstances. Generally money paid under economic duress can be recovered and contracts voided (provided no affirmation).
