Duress and Undue Influence

Question 1

How does the law respond to inequality of bargaining power? consider both common law and equity

Answer 1

Common Law- duress and economic duress
Equity- doctrine of undue influence

Question 2

What is duress?

Answer 2

when a party is induced into a contract by force/threat

Question 3

Duress in contract law

Answer 3

Barton v Armstrong 1976- threat to murder claimant, if he doesn’t agree to buy shares in a company

Question 4

Duress to goods

Answer 4

Astley v Reynolds 1731-

Question 5

Economic duress, historically- case example

Answer 5

denied in The Siboen and The Sibotre 1976

Question 6

Economic duress, recognized in what case? Why is it difficult to apply?

Answer 6

Universe Tankships 1983- company was pushed to increase wages in return of lifting a blacking on a ship
Yet it remains, the most diff form of duress to apply, because courts are reluctant to intervene in bad bargains

Question 7

Give an example of an unsuccessful claim under duress

Answer 7

CTN Cash and Carry v Gallagher 1994- claimant believed the payment was lawful, then tried to claim economic duress

Question 8

Supreme Court Requirements for Duress- Lord Burrows

Answer 8

threat or pressure must be illegitimate
threat or pressure must have caused claimant to contract
ECONOMIC ONLY: Claimant must have had no alternative, but to give in

Question 9

Undue Influence

Answer 9

arises when one party relies upon another
parent - child/ doctor-patient and etc

Question 10

Case Example- husband-wife relationship

Answer 10

Barclays Bank v O’Brien 1993- a wife signed a mortgage that could cost her home, for a company only her husband had an interest in

Question 11

2 categories of undue influence- Lord Wilkinson

Answer 11

Actual- Williams v Bayley 1866- father-son
Presumed- Ethridge No 2- similar to O’Brien’s case

Question 12

Preventing Undue Influence

Answer 12

Bank to be out on notice- advise the more vulnerable spouse- Minimum Standard
When put on notice- arrange a private meeting/provide legal advice

Question 13

What is Lord Denning’s proposal regarding bargaining power?

Answer 13

Doctrine of Inequality of Bargaining Power

Question 14

Lord Scarman, debates this proposal

Answer 14

he claims it is a parliamentary responsibility, i.e. Legislation- Consumer Safety Act 1978, Consumer Credit Act 1974, Supply of Goods and Services Act 1982