Duress Flashcards
What are the different types of duress?
- to the person
- to goods
- economic
What is duress to the person?
Actual or threatened violence
What is the test to show duress to the person?
physical threats contributed to the decision to enter into contract
Who is the burden of proof on to show duress?
Person who exerted pressure to show that it didn’t contribute to the decision
What is duress to goods?
Threat to seize owner’s property or damage it
What is the test to show duress to goods?
Agreement wouldn’t have been made if no duress
What are the two types of duress?
Economic duress
Undue influence
What is economic duress?
Pressure-
A) practical effect of compulsion/lack of choice
B) Illegitimate
C) Significant cause
What is the test for significant cause for economic duress?
But for test
What is the legal effect of duress on contract?
Voidable
What is the remedy for contracts made under duress?
Rescission unless affirmed
When may the courts say a contracts is affirmed?
After duress ceased, party fails to challenge in timely manner/acts in compliance with terms
What does lack of practical choice mean?
No practical alternative but to acquiesce to the demand
What are the factors considered when deciding if economic duress was illegitimate?
- Actual or threatened breach of contract
- Pressure applied in good or bad faith
- Did victim protest
- Did victim affirm
What should happen if an act of coercion looks like duress and undue influence?
Bring action on both grounds
What was the definition of undue influence in RBS v Etridge?
Persons consent to a transaction produced in such a way that the consent ought not fairly to be treated as an expression of their free will
What are the two types of undue influence?
- Overt acts of improper pressure or coercion
- One party has influence or ascendancy over the other and takes advantage of it
What is the test for overt acts of improper pressure where the behaviour was deceitful or fraudulant?
It was a factor in deciding
What is the test for overt acts of improper pressure where the behaviour was not deceitful or fraudulant?
But for test
What is the common scenario where one party has influence or ascendancy over the other and takes advantage?
spouse (business owner) enters agreement where other spouse’s share in matrimonial home is used as a security for a loan to the business
What are the elements of undue influence?
- person placed trust and confidence in other
- person abused that trust in seeking consent
What is another common relationship where there may be no need to show they placed trust and confidence in the other?
very vulnerable/dependant
What is an irrebuttable presumption of undue influence?
Court wont allow an argument that there wasnt influence
What are the irrebuttable presumption relationships?
- Parent and (minor) child
- Guardian and ward
- Trustee and beneficiary
- Solicitor and client
- Doctor and patient
What is the proof to show advantage taken of a relationship of trust and confidence?
transaction which requires explanation
What happens if a person claiming undue influence can show a relationship of trust/irrebuttable presumption and a transaction which requires explanation?
Burden shifts to wrongdoer to prove no undue influence
What is a transaction that requires explanation?
does not fit with what would usually be expected in the relationship
What is the equitable remedy for undue influence?
Setting aside
What are the two rules to remember regarding equitable remedies for undue influence?
- delay defeats equity
- those who come to equity must have clean hands
What must be shown before considering whether a contractor had constructive notice of undue influence by a third party?
Undue influence
When will a creditor be put on notice of undue influence to a wife shown in Barclays v O’Brien?
- transaction on face vaslue not to financial advantage of wife
- substantial risk that husband has committed a legal/equitable wrong that entitles wife to set aside
How can a creditor take reasonable steps to satisfy that a wife’s agreement has been properly obtained?
- confirmation from a solicitor
- provide solicitor with sufficient information
- if aware (constructively or actually) that wife may be misled, must tell solicitor
What should a solicitor warn a wife about when advising on acting as a surety?
their involvement may be relied upon by the bank to counter allegations
What is the core minimum advice a solicitor should give when advising a wife on acting as a surety?
a. Explanation of documents and practical consequences including losing home
b. Seriousness of risk, duration and terms of the security and wife’s assets/means
c. The fact the wife has a choice
What did Etridge extend undue influence by a third party to?
non commercial relationships
