Economic Duress

Question 1

Define

Answer 1

Any contract made where one party is forced into it should not be valid. Undue influence occurs when one party entered the contract as a result of pressure which deprived that party of independent judgement.

Question 2

What is economic duress

Answer 2

Threat to damage someone financially
(Subsea v Petroleum)

Question 3

Pressure

Answer 3

(Subsea v Petroleum)

Question 4

Pressure must be illegitimate

Answer 4

The courts will look at:
1. Whether there has been an actual or threatened breach of contract.

2. Whether there was any realistic practical alternative for the ‘victim’.
3. The conduct of both parties at the time. Whether ‘victim’ was independently advised or protested at the time or whether the party applying the pressure was acting in good or bad faith.

Question 5

C lacks any other practical choice in the contract

Answer 5

The courts will then look at whether the practical effect of the threat is that C is compelled and lacks any other practical choice in the contract but to agree

Question 6

Sufficiently significant causal link

Answer 6

(Kolmar v Traxpo)
It must be shown that the economic duress is causal.
The burden of proof is on the claimant to prove this link induced them to enter into the contract.

Question 7

Remedies

Answer 7

Economic does not lead to damages.
The courts can make an order of restitution of property or money extracted under duress.