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Duress Notes

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INTRODUCTION WHAT IS 'DURESS'?
Duress involves pressure created by an explicit or implicit threat to do something wrongful. Rescission of a contract for duress will be barred where the party seeking rescission cannot offer. In Halpern v Halpern [2007], CA held that rescission for duress was no different in principle from rescission for other vitiating factors, such as misrepresentation. In contrast with misrepresentation, there is at present no independent remedy of damages for duress (though sometimes the conduct amounting to duress will give rise to separate tortious liability), so if rescission is barred the victim is without a remedy.

HOW DOES A PLEA OF DURESS OPERATE IN PRACTICE?
As a vitiating factor in contract: where A enters into a contract with B as a result of B's duress, or (more commonly) agrees to vary an existing contract:
? A might plead duress as a defence when B attempts to enforce the new contract or variation; or
? A might perform the contract or variation, but then seek to set aside / rescind the contract as against B.

DURESS TO THE PERSON (in outline only) (Threat to crime) Threats of violence are the most obvious example of duress. There are two controversial issues regarding duress to the person, namely, what the relevant test of causation is and whether the resulting transaction is void or voidable. The PC considered both issues in Barton v Armstrong [1976]. A made death threats against B to persuade B to buy out A's shareholding in the company, but B wished to do this anyway because he thought that this was commercially desirable. So B executed a deed purchasing A's shares, but later regretted the transaction and sought to undo the transaction. A argued that B would have executed the deed even if there had been no threats; his threats were not a 'but for' cause and thus there should be no relief. The PC disagreed. The threats don't need to be a 'but for' cause of A entering into the contract, as long as they contributed to A's decision. This relaxation of the test of causation is analogous to the position for fraudulent

misrepresentation. In less serious forms of wrongdoing, such as economic duress, a strict test of factual causation applies.
- Ie held so long duress CONTRIBUTED sufficient, no need BUT FOR (majority) PC in Barton also decided that the deed executed by B was void, not merely voidable. (ie duress to the person renders the contract void) Some commentators have criticised this as being inconsistent with other forms of duress (particularly economic duress) which render transactions voidable only, but this criticism may be over-generalisation. It is perfectly understandable that the more serious forms of duress should have a greater vitiating effect on transaction and it seems right in principle that if you hand over your goods at gunpoint, the legal effect should be the same as if the goods had been stolen from you.

DURESS TO GOODS (in outline only) (Threat to Tort) A wrongful threat to detain or the detaining of another party's property that leaves the party no alternative but to agree to a transaction (Maskell v Horner
[1915])

ECONOMIC DURESS (Threat of breach of contract) Pao On v Lau Yiu Long [1980] (Confirming The Atlantic Baron) -> economic duress makes contract voidable Dyson J in DSND Subsea v ASA [2000] laid down the ingredients of economic duress: there must be pressure (a) whose practical effect is that there is compulsion on, or a lack of practical choice for, the victim, (b) which is illegitimate, and (c) which is a significant cause inducing the claimant to enter into the contract. This was no problem prior to Williams v Roffey Bros [1991] - since there was no consideration. But became a problem after the case since practical benefit of the completion can be consideration Can have economic duress for renegotiations?-

Yes
? Eg Atlas Express Ltd v Kafco (1989) (basket weaving, got mixed up prices with big company, said wouldn't deliver basket unless double rates) -> renegotiation viewed as economic duress
? Cf The Sibeon and Sibotre (1976) (renegotiation, D told C that feared going bankrupted if did not lower rates, C thought would lose out if D went bankrupt and thus lowered rates) -> Kerr J decided that economic duress can invalid a contract or contractual variation - though failed on the facts as it was a "mere commercial pressure" No

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