Duress Flashcards
What are the 6 types of vitiating factors in contract law?
The types of vitiating factors are:
1. Illegality
2. Duress
3. Non est factum
4. Undue influence
5. Misrepresentation
6. Mistake
What is the classical theory in contract law?
The classical theory presumes:
Equal bargaining power between parties
Contracts are based on exchange, not promise
Contracts theoretically reflect consent and free choice
Caveat emptor: Buyer beware
Lack of true consent rarely justifies setting aside a contract
Courts are reluctant to intervene unless necessary
What is the effect of duress on a contract?
Duress renders the contract voidable, meaning the contract can be rescinded, but is not automatically void. Remedy: Rescission (subject to bars like affirmation or undue delay)
No liability for damages
What are the 2 key requirements for duress in contract law?
The requirements for duress are:
- Illegitimate Pressure: Threats (lawful or unlawful)
- Causation: The pressure must cause the party to enter into the contract
What is the legal principle in Barton v Armstrong (1976)?
In Barton v Armstrong, the Privy Council ruled that threats, even if not the sole reason for the agreement, are sufficient to vitiate consent and make the contract voidable. The threats created mental torment and fear
What is economic duress?
Economic duress occurs when one party is coerced into a contract by illegitimate pressure related to economic or financial threats, and there is no reasonable alternative to accepting the terms
What 3 things does the test for economic duress include?
The test for economic duress includes:
1. Compulsion of will
- Illegitimate pressure
- No reasonable alternative for the threatened party
In Pao On v Lau Yiu Long (1980), why was the claim for duress dismissed?
The claim for duress was dismissed because the pressure was not deemed to be sufficient to vitiate consent. Commercial pressure alone was not enough to constitute duress
What is the key case for duress to goods?
Maskell v Horner (1915), where a merchant recovered payments made under duress after being threatened with the seizure of goods
What does Diplock’s view on duress suggest?
Diplock suggested that the apparent consent in cases of duress is induced by illegitimate pressure, which makes it revocable unless explicitly approved after the pressure cease
What is the key case for economic duress by lawful act?
CTN Cash & Carry v Gallagher (1994), the court ruled that lawful threats may still constitute duress if the conduct is unjustifiable or in bad faith, even if the threat itself is lawful
What are the 4 key elements for a claim of economic duress?
The key elements for economic duress are:
1. Illegitimate pressure
- Significant cause: Pressure must induce the party to enter the contract
- Voidable, not void: The contract can be rescinded but not automatically void
- No practical alternative to submitting to the pressure
