Economic Duress

Question 1

What is economic duress?

Answer 1

Party forced into contract as a result of financial threats.

Question 2

Allcard v Skinner

Answer 2

Novice nun nearly gave all money to mother

Question 3

Atlas Express v Kafco

Answer 3

Agreement induced by illegitimate pressure - economic duress

(Agreed to transport Kafco’s good for many months, at agreed rate. Atlas insistences on min quantities to be delivered)

Question 4

Economic duress pressure examples

Answer 4

• Practical effect that there is a compulsion on, or a lack of practical choice for, the victim
• The pressure must be illegitimate
• The illegitimate pressure is significant cause of making the contract

Question 5

Universe Tankships v international transport workers Federation

Answer 5

Money had been extracted as a result of economic duress, must be repaid

(ITWF blocked ship, made several demands to pay also demanded the ship owners pay a large sum of money, ship owners)

Question 6

Pao on v Lau yiu Long

Answer 6

• Did the person claiming to be coerced protest about the pressure?
• did the person have any other available course of action that was reasonable?
• was he independently advised before taking the action?
• after entering into the contract, did he take steps to make the contract void?

Question 7

CTN Cash & Carry v Gallagher

Answer 7

Duress not available when the action threatened was lawful

(Delivery of cigarettes to wrong address, got stolen, Gallagher sent invoice for cigarettes, threaten to withdrawal the claimants credit facility unless paid)
- Not economic duress

Question 8

Progress Bulk Carriers Ltd v Tube City

Answer 8

Pressure could be illegitimate even when lawful
(Delays for agreed ship, gave substitute ship, value of cargo falling. Would be ‘ catastrophic’ losses if they got delayed any longer, claimed losses from owners)
- Economic duress

Question 9

The Atlantic Baron

Answer 9

contract was voidable for duress, claimants had left it so long they had affirm the contract and lost their right to resend

agreed to build chip for claimants, specifiedin US dollars
US dollars was devalued by 10% defendants threatened not to complete unless claimants paid +10%
8 moths after delivery, claimants started legal action

Question 10

Remedies for Economic Duress

Answer 10

Restitution - restore person to position they would have been in