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Duress What must be proved
1. Illegitimate pressure applied by enforcing party
Universe Tankships v International Transport Workers' Federation : o Lord Diplock:
? The threats must be so catastrophic so as to vitiate C's will, vitiating their consent to various agreements
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
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
With threats to the person and property (detaining/doing violence to) o Barton v Armstrong : 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.
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
Atlas Express Ltd v Kafco Ltd : 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
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
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
But doctrine not applicable if the promisee had applied illegitimate pressure to obtain it ("he who seeks equity must come with clean hands")
Williams v Roffey Brothers : 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
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 : 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.
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 :
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
Even where threatening or in actual breach of duty.
Economic Duress: Lawful Act Duress o Universe Tankships v International Transport Workers' Federation : 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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