4.2: Economic Duress

Question 1

What is economic duress?

Answer 1

Where someone enters into the contract as a result of financial threats, there must be no other choice for the victim and there must be illegitimate pressure

Question 2

In what two ways can pressure be illegitimate? Give examples to support this

Answer 2

• A threat to breach contract (Atlas Express v Kafco)

- A threat to commit a tort (Universe Tankships v International Transport Federation)

Question 3

What is meant by ordinary commercial pressure?

Answer 3

-Ordinary commercial pressure is not enough, e.g. a threat to renew the contract or let a company go into administration

Question 4

What case gave guidance of what should be considered in deciding illegitimate pressure and what are these steps?

Answer 4

• Pao On v Lau Yiu Long
• Did the person protest the pressure, was another course of action available, was independent advice taken before entering the contract and did they attempt to make the contract void after entering

Question 5

What case shows that pressure can be illegitimate even when lawful, even though this is very rare?

Answer 5

-Progress Bulk Carriers v Tube City

Question 6

What case shows that the right to end the contract by economic duress may be lost through a lapse of time?

Answer 6

-The Atlantic Baron

Question 7

What are the remedies for economic duress?

Answer 7

• Order the contract to be declared void/recission
• Make an order for restitution of property or money extracted under duress, in order to put them back in their original position