(BLUE) Economic Duress Flashcards

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1
Q

What are the 2 elements of economic duress?

A

-Illegitimate commercial pressure
-Compelled one party to enter a contract

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2
Q

What is legitimate commercial pressure?

A

An integral part of trading in a free market economy e.g. threatening to take one’s business elsewhere to get a better deal.

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3
Q

In which case was there just ordinary commercial pressure?

A

CTN Cash and Carry v Gallagher- Gallagher had the right to withdraw credit, they were not threatening to do anything unlawful or illegitimate- they only used pressure that they were free to use.

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4
Q

In which case was there illegitimate pressure to breach a contract?

A

Atlas Express v Kafco- Atlas had a contract to deliver the goods and so not doing this would be breach of contract. Threatening to breach a previous contract is illegitimate pressure as it is a threat to do something unlawful.

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5
Q

What did Williams v Roffey say about illegitimate commercial pressure?

A

A mere indication that a contract will not be completed is not illegitimate commercial pressure. (One party might inform the other that they might not finish and money is not demanded or asked for).

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6
Q

In which case was there illegitimate pressure to commit a tort?

A

The Universe Sentinel- the pressure was illegitimate as they had no right to block the boat in and so they were committing a tort.

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7
Q

What does it mean that the party was forced into making the contract against their will?

A

Pao On sets out factors that prove one party was compelled:
-They protested about the pressure at the time
-There was no other reasonable/practical course of action that could have been taken
-They were not independently advised before contracting
-After making the contract, they tried to take steps to get out of the contract as soon as possible

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8
Q

Why were there no practical alternatives in Atlas Express v Kafco?

A

If the goods were not delivered very soon, they would have lost their biggest client and gone out of business- therefore there was no time for them to agree- no practical alternative. They protested against the extra charges at the time and refused to pay the extra charges as soon as the deliveries were made.

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9
Q

Why could the contract not be set aside in The Atlantic Baron?

A

There was an illegitimate threat to breach the contract, the party didn’t have an alternative but didn’t protest at the time and waited 8 months after the contract was done before doing anything about the contract (not taken steps to get out of the contract). Waiting too long is a bar to rescission under economic duress.

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10
Q

Why did economic duress fail in The Siboen and The Sibotre?

A

Only using legitimate pressure as they were simply threatening not to contract with them in the future. C had other alternatives as they weren’t forced to keep doing business with these people, they chose to do so for carefully considered business reasons.

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11
Q

What is the remedy for economic duress?

A

Successfully proving economic duress means that a contract can be rescinded as long as no bars apply. This would put victim back in the position they were in before entering the contract.

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