Duress and Undue Influence

Question 1

“Duress” and “Undue Influence” - which was developed by the ‘common law’ courts and which was developed by the courts of equity?

Answer 1

“Duress” - Common Law Courts
“Undue Influence” - Courts of equity

Question 2

What is duress?

Answer 2

When one party coerces the another into a contract - consent is not present or not given freely

Question 2

What is the effect on the contract if one party enters into it under duress?

Answer 2

The contract is voidable

Question 3

What are the three types of duress?

Answer 3

(1) Duress to the person
(2) Duress to property
(3) Economic Duress

Question 4

Define duress to the person?

Answer 4

Actual or threatened violence

Question 5

When will duress to the person be found? (Barton v Armstrong)

Answer 5

Once it is established that the physical threats contributed to the decision to enter into the contract so long as the threats were one of the reasons for contract.

Question 6

Who is the burden of proof in the case of duress to the person?

Answer 6

The party who exerted the pressure has the burden of proof

Question 7

What is the causation test for the party who exerted the pressure to prove?

Answer 7

That the threats and unlawful pressure contributed nothing to the victim’s decision to contract

Question 8

Define duress to goods

Answer 8

A threat to seize the owner’s property or to damage it (Occidental Worldwide Investment v Skins A/S Avanti (The Simeon & Sibotre)

Question 9

How do you establish duress to goods?

Answer 9

It must be shown that the agreement would not have been entered into if there had not been the duress.

Question 10

What are the three elements of pressure in the definition of duress? (DSND Subsea v Petroleum Geo Services)

Answer 10

(a) lack of practical choice for the victim
(b) the pressure is illegitimate
(c) it is a significant cause for the claimant to enter into the contract

Question 11

How was the courts defined ‘significant cause’ in relation to duress?

Answer 11

It must be shown that BUT FOR the duress the contract would not have been entered into.

Question 12

What effect on the contract does duress have?

Answer 12

The contract is voidable

Question 13

What is the remedy for a voidable contract?

Answer 13

Recession

Question 14

Define the remedy of recession

Answer 14

Recession involves returning the parties to their pre-contractual position

Question 15

If the contract (entered into under duress) is affirmed, what effect does this have on recession?

Answer 15

The remedy is lost

Question 17

What four factors do the courts take into consideration when determining whether the duress was “caused by illegitimate pressure”

Answer 17

(1) Has there been a threatened breach of contract?
(2) Was the pressure applied in good or bad faith?
(3) Did the victim protest?
(4) Did the victim affirm?