Economic Duress

Question 1

what is economic duress?

Answer 1

duress is when someone is coerced into doing something due to a threat. in contract law, any contract made where one party is forced into it, should not be valid.

Question 2

three types of economic duress

Answer 2

undue influence
duress
economic duress

Question 3

undue influence (Allcard v Skinner)

Answer 3

a relationship between parties which has been exploited by one party to gain an unfair advantage

Question 4

Allcard v Skinner

Answer 4

facts: woman in a convent claiming undue influence by Skinner in a substantial gift.
held: court ruled in her favor, emphasizing the spiritual influence and setting aside the gift due to undue influence.
principle: undue influence can void a transaction, particularly when there’s a trust-based relationship

Question 5

duress (Barton v Armstrong)

Answer 5

a party enters a contract due to threats of violence (crimes or torts)

Question 6

Barton v Armstrong

Answer 6

facts: a company director failed to disclose his personal interest in a company transaction.
held: a company director’s failure to disclose a personal interest in a transaction breached their duty and could lead to the contract being set aside.
principle: established that company directors must disclose personal interests in transactions with the company to avoid potential invalidation of the contract.

Question 7

Economic duress (Universe Tankships of Monrovia v International Transport Workers Federation) (CTN Cash and Carry v Gallagher)

Answer 7

a party enters into a contract due to financial threats

Question 8

Universe Tankships of Monrovia v International Transport Workers Federation

Answer 8

facts: a ship’s crew refused to sail due to safety concerns, leading to financial losses for the shipowner.
held: the ship’s crew was justified in frustrating the contract due to safety concerns, setting a precedent for valid frustration on safety grounds.

Question 9

CTN Cash and Carry v Gallagher

Answer 9

facts: the buyer rejected goods, citing inferior quality.
held: court upheld the rejection.
principle: buyers can rightfully reject goods if they don’t meet the agreed quality standards

Question 10

duress info

Answer 10

in economic duress there’s no valid consideration as it has not been freely given. duress isnt concerned with the absence of consent but instead the wrongful nature of the threats. if the courts find there is duress, the contract is voidable (same for misrepresentation) its valid until the innocent party takes action.