economic duress Flashcards
Economic duress
Someone enters a contract due to financial threats
if economic duress is established it makes a contract voidable so it will continue until the innocent party avoids it in skeate v Beale threats to property were not deemed to be duress
Core case economic duress
Atlas express v kafco
Held: this was economic duress no consideration was provided by atlas for the additional term
Test for economic duress
- Did the pressure force you into the contract/or leave a lack or practical choice for the victim
- The pressure must be illegitimate
- The illegitimate pressure is a significant cause of making the contract all need to be established
Force you into the contract/lack of practical choices
For this to succeed there has to be evidence that there was no choice but to agree universe tankships v international transport workers (itw)
Held: this was economic duress and the money had to be repaid
The pressure must be illegitimate
Factors were set out in pao on v lau yiu long
pao on v lau yiu long
Held:in order for economic duress to be established the following must be considered
- did the person claiming economic duress protest?
- was there another reasonable course of action available
- was he independently advised before taking action?
- after entering the contract did they take steps to avoid one thing in question in this case this was not economic duress
- the criteria wasn’t met it was merely commercial pressure
Ctn Cain and carry v Gallagher
Of the action threatened is a lawful one this may not be economic duress held: the claim failed as it was lawful for D to remove the credit agreement at any time as this was stated in the contract
Case for the action threatened is a lawful one
Ctn Cain and carry v Gallagher
The illegitimate pressure is a significant cause of making the contract
This means c would have not entered the contract it wasn’t for the pressure of the D mil depends on the circumstances of the case progress bulk carriers V tube city held: this was economic duress the hirers only agreed as they had no alternative
Case for one night to claim economic duress may be lost due to lapse of time
The Atlantic baron held: there probably had economic duress but waiting 8 months simply affirmed the contract
The Atlantic baron
The right to claim economic duress might be lost due to lapse of time
Remedies
Restitution of property or money- the court ban order the property or money gained through economic duress to be returned to the innocent party the contract in economic duress also will be avoidable