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Duress Notes

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Duress What must be proved

1. Illegitimate pressure applied by enforcing party

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Universe Tankships v International Transport Workers' Federation [1983]: o Lord Diplock:
? The threats must be so catastrophic so as to vitiate C's will, vitiating their consent to various agreements

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It is not that the party seeking to avoid the contract did not understand the terms of the agreement o It is that his apparent consent was induced by pressure exercised upon him which the law does not feel to be legitimate. o Lord Scarman:
? Whether the threat is illegitimates depends on the nature of the threat and of the demand

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If the threat is independently unlawful (e.g. I will kill your family, or a threat= a breach of duty by the enforcing party) o then the threat is "generally" treated as illegitimate

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With threats to the person and property (detaining/doing violence to) o Barton v Armstrong [1976]: C agreed in a deed to buy out D's interest in Landmark after entering into it because of D's threat to have him killed. D argued that commercial advantage also a reason for it, so no duress.
? Lord Cross: act is unlawful and therefore constitutes illegitimate pressure.

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Economic Duress: Threats to breach a contract o Where one party threatens to breach an existing contract unless the other party pays more or accepts less performance than was originally due.
? Chen Wishart: this is treated as illegitimate pressure as it amounts to a threat of unlawful conduct (breaching a contract) o BUT when should these re-negotiations be enforced?
? Doctrine of Consideration: never - if not additional consideration, then modification not enforceable

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Atlas Express Ltd v Kafco Ltd [1989]: C undervalued costs of carriage for D to W, whom D had a lucrative contract with. C attempted to renegotiate, but after failing, demanded that D sign new agreement or C would not carry goods. D, under pressure b/c no alternative carrier, signed new document. Then attempted to set aside. o Tucker LJ:
? D certainly signed the document under compulsion

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Is true that economic duress is distinct from commercial pressure
? But economic duress will occur where D's apparent consent was induced by pressure that was illegitimate

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Equally, there was no consideration to support the new agreement so it ain't legit. o Burrows: doesn't say why pressure was illegitimate
? Moi: but that was because D believed they could not get a new carrier at such short notice and that they would breach their contracts otherwise
? BUT promissory estoppel: can enforce promises of same for less in limited circumstances

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But doctrine not applicable if the promisee had applied illegitimate pressure to obtain it ("he who seeks equity must come with clean hands")

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Williams v Roffey Brothers [1991]: o Russell LJ:
? Where a party undertakes to make a payment because by so doing it will gain an advantage arising out of the continuing relationship with the promisee

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the new bargain will not fail for want of consideration as estoppel will apply. o Relevance of good faith/bad faith to economic duress
? CTN Cash and Carry v Gallaher Ltd [1994]: D supplied cigarettes to wrong warehouse of C, goods stolen. Mistakenly thinking risk had passed to C, D demanded payment, threatening to cut credit of C if failed to pay up. C paid up, then tried to set aside agreement for duress.

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Steyn LJ: o Since D thought in good faith that the goods were at the risk of C and that C owed D the money in question
? D's motive in threatening credit withdrawal was an exercise of lawful commercial self interest in obtaining a sum they thought due to them. o Law should not open good faith threats of lawful action and look over them when parties fall out
? It would introduce a substantial and undesirable element of uncertainty to the law.
? Huyton SA v Peter Cremner [1999]:

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Mance J: o Authority suggests that good faith and bad faith may be relevant considerations,
? especially since the state of mind of a party making a threat may be significant

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Even where threatening or in actual breach of duty.

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Economic Duress: Lawful Act Duress o Universe Tankships v International Transport Workers' Federation [1983]: C had ship blacklisted by D, so no tugs to help it out. C paid $6480 to pension fund, then claimed it back.

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