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Duress Notes

GDL Law Notes > GDL Contract Law Notes

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A more recent version of these Duress notes – written by Cambridge/Bpp/College Of Law students – is available here.

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Revision: Contract

[DURESS ]
General definition

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Poole J: 'some form of coercion or threat to the person, property, or to a person's financial interests'

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Vitiating factor: Contract entered into under duress is voidable - can be undone at the innocent party's request

Duress to the person

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Leading case: Barton v Armstrong - A uttered threats to kill B - sign this agreement 'or else' o

Burden of proof on the D to prove that the threats and unlawful pressure contributed nothing to C's decision to execute the agreement

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Causation test for duress to the person is not a difficult one to overcomeDuress need not be the only reason for the contract: must merely be one of themContrast with test for economic duress which is much more stringent and where T'he minimum basic test of subjective causation in economic duress ought, it appears to me, to be a 'but for' test'' (Huyton SA v Peter Cremer GmbH &Co)

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Williams v Bayley - threat of imprisonment constitutes threat to the person

Duress to goods

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Siboen and The Sibotre - contract CAN be avoided where there is a threat to seize the owner's property o

Per Kerr J - 'if I should be compelled to sign a contract...under an imminent threat of having my house burnt down...I do not think that the law would uphold the agreement'

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But for test - but for the duress you wouldn't have agreed

Economic duress Historical development

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Idea that economic duress may be grounds upon which a contract could be set aside - origins in Investment Corporation v Skibs A/S Avanti, (The Siboen and the Sibotre)- Justice Kerr

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Decision of Kerr - affirmed by Lord Scarman in Pao On v Lau Yiu Long (Privy Council) 1) Protest 1

Revision: Contract

[DURESS ]
2) Alternative causes of action open to him?
3) Acquired independent legal advice?
4) Took steps to avoid contract as soon as possible?

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Judgement of Lord Scarman in Universe Tankships v International Transport Workers' Federation: move away from vitiation of consent approach (duress doesn't deprive victim of choice but presents him with too much: choice between the lesser of two evils: emphasis on the illegitimacy of the pressure exerted, pressure, the practical effect of which is compulsion or the absence of choice

Current Approach Definition set of by Mr Justice Dyson in DSND Subsea Ltd v Petroleum Geo Services ASA (2000) confirmed in Kolmar Group AG v Traxpo Enterprises PVT Ltd and Carillion Construction v Felix

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Must be pressure resulting in: (a) Compulsion or lack of practical choice for the victim (b) Which is illegitimate, and (c) Which is a significant cause of the victim entering into the contract

Dyson: importance of distinguishing illegitimate pressure from the 'rough and tumble' of commercial exchanges

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But duress will rarely work due to judicial reluctance to interfere with freedom of contract: (i)

The parties are allowed maximum licence in setting the terms of their contracts and

(ii)

Those parties must then be held to those agreed obligations

(a) Lack of practical choice : 'whether the victim had any realistic practical alternative but to submit' - Dyson o

Litigation rarely viable alternative

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B&S Contracts v Victor Green Publications (1984): o

Victor Green contracted B&S to build stand at Olympia for the defendant: C

threatened to cancel contract if D didn't pay extra PS4.500, so D agreed to, but then deducted the amount from their final payment. C sued but it was held that they were not entitled to the 2

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