Economic Duress Flashcards
What does economic duress (EcD) do to a contract?
EcD makes a contract voidable.
When does EcD occur?
When someone enters into a contract as a result of a threat to damage a business or a person financially. To make a contract voidable, the requirements are:
1) Compulsion or lack of practical choice of the victim (Universe Tankships).
2) Which is illegitimate: Factors to consider were laid out in Pao on v Lau to decide whether EcD was present. Did the person:
- Protest about the pressure?
- Have any other available course of action which was reasonable?
- Independently advised before taking the action?
- After entering the contract, take steps to make the contract void? (CTN V Gallagher).
3) Which is a significant cause inducing the claimant to enter into the contract.
