Duress

Question 1

What are the three core elements of duress?

Answer 1

1. The person seeking enforcement of an obligation seeks to do so by his own wrongdoing (R)
2. The person denying the contract’s validity did not truly consent to the contract (Pao On)
3. As a corollary to 2, it must be shown that duress is a cause of V’s entry into the contract (Barton); for economic duress the test is one of “substantial” or “but for” cause but is a flexible one (Huyton)

Question 2

What are the three core elements of duress?

Answer 2

1. The person seeking enforcement of an obligation seeks to do so by his own wrongdoing.
2. The person denying the contract’s validity did not truly consent to the contract.
3. As a corollary to 2, it must be shown that duress is a cause of V’s entry into the contract (Barton); for economic duress the test is one of “substantial” or “but for” cause but is a flexible one (Huyton)

Question 3

What are the three core elements of duress?

Answer 3

1. The person seeking enforcement of an obligation seeks to do so by his own wrongdoing.
2. The person denying the contract’s validity did not truly consent to the contract.
3. As a corollary to 2, it must be shown that duress is a cause of V’s entry into the contract (Barton); for economic duress the test is one of “substantial” or “but for” cause but is a flexible one.

Question 4

Barton v Armstrong

Answer 4

The deeds were void for duress even though Barton might well have entered into the contract without having been threatened; it is sufficient for duress to the person that the threats were a cause, not necessarily the predominant cause of B’s entry into the contract

Question 5

Are contracts tainted by duress void or voidable?

Answer 5

In Barton the UKPC mentioned that duress rendered the deed void, but Pao On confirms the generally accepted view that duress only renders the contract voidable.

Question 6

The Evia Luck

Answer 6

Duress to goods is capable of vitiating a contract; Skeate v Beale disapproved.

Question 7

What are the three elements of economic duress?

Answer 7

Dyson J in DSDN Subsea -

a) The practical effect is that there is compulsion on, or a lack of practical choice for, the victim
b) The pressure is illegitimate
c) The pressure is a significant cause inducing C to enter the contract

Question 8

Pao On (definition of “lack of consent requirement” + 4 relevant factors)

Answer 8

The essence of duress is a “coercion of the will so as to vitiate consent”.

1. Whether V protested at the time of coercion
2. Whether he had an alternative course open to him (e.g. adequate legal remedy)
3. Whether V had independent advice
4. Whether V took steps to avoid the contract after entering it

Question 9

Victor Green (lack of consent)

Answer 9

The lack of reasonable alternatives open to C (the consequences of not having the stands completed on time would have been extremely severe) placed him in an “impossible position”, persuading the court that C had been the victim of economic duress

Question 10

According to McK, how should the court view the factor that C had no reasonable alternatives?

Answer 10

• McK notes the dicta of the minority in Barton that mere “overwhelming pressure/lack of choice” is not sufficient to consitute duress and suggests emphasis must be on Ds role in reducing the reasonable alternatives open to C (favours View 2, below)

Question 11

According to McK, how should the court view the factor that C had no reasonable alternatives?

Answer 11

McK notes the dicta of the minority in Barton that mere “overwhelming pressure/lack of choice” is not sufficient to consitute duress and suggests emphasis must be on Ds role in reducing the reasonable alternatives open to C

Question 12

The Atlantic Baron

Answer 12

If C subsequently affirms the variation made under compulsion (here by delaying its claim) it cannot then bring a claim for duress.

Question 13

Universe Tankships

Answer 13

Essence of duress is pressure the law regards as illegitimate

Question 14

Universe Tankships

Answer 14

Essence of duress is pressure the law regards as illegitimate. The rationale of duress is not a lack of understanding on the part of V (as Atiyah observes V does make a choice, albeit he must choose the latter of two evils), but that his apparent consent was induced by pressure illegitimate in law

Question 15

Gallaher (caveat + McK’s comment on caveat).

Answer 15

A refusal to contract cannot by itself constitute economic duress, at least where the alleged duressor is bona fides.

o Steyn LJ and Nicholls V-C were careful to state that they were NOT deciding that a refusal to contract can never constitute duress; it may thus be open to future courts to treat D’s good faith as an essential component of the ratio
o McK – even if D had been in bad faith, the principle of freedom of contract dictates that D must be free to contract or not to contract with whomever it pleases, for whatever reason

Question 16

R

Answer 16

• The legitimacy of the pressure must be examined on two planes

i. The nature of the pressure - Generally any threat of unlawful action will be illegitimate, while lawful threats can sometimes be illegitimate
ii. The nature of the demand which the pressure is applied to support

Question 17

R

Answer 17

The legitimacy of the pressure must be examined on two planes

i. The nature of the pressure - Generally any threat of unlawful action will be illegitimate, while lawful threats can sometimes be illegitimate
ii. The nature of the demand which the pressure is applied to support

Question 18

Progress Bulk Carriers

Answer 18

“The more serious the impropriety and the greater the moral obloquy which attaches to the conduct, the more likely the pressure is to be seen as illegitimate”

Question 19

When may a threat of lawful action constitute illegitimate pressure?

Answer 19

A threat though lawful in itself may be illegitimate if used to attain a goal which is unlawful – Universe Sentinel, per Lord Scarman

Question 20

DSDN Subsea (2 factors indicating illegitimate pressure)

Answer 20

1. Where there has been an actual or threatened breach of contract
2. Where the alleged duressor acted in bad faith

Question 21

DSDN Subsea (2 factors indicating illegitimate pressure + ratio)

Answer 21

1. Where there has been an actual or threatened breach of contract
2. Where the alleged duressor acted in bad faith

Ratio - although D threatened to breach contract, the threat did not appear to be a significant cause and D appeared to be in good faith.

Question 22

Alec Lobb

Answer 22

Refusal to waive an existing contractual obligation does not generally constitute illegitimate pressure.

Question 23

Kolmar Group

Answer 23

“A threat to break a contract will generally be regarded as illegitimate (e.g. in Atlantic Baron), particularly where D must know that it would be in breach of contract if the threat were implemented”

Question 24

To what remedy does economic duress give rise?

Answer 24

Universe Tankships – The remedy to which economic duress gives rise is NOT an action for damages but

i. An action for restitution of property exacted under such duress
ii. The avoidance of any contract induced by duress