Economic Duress Flashcards
Which of the following is a required element of economic duress?
A. Failure to disclose profit margins
B. Breach of statutory duty
C. Lack of practical choice
D. Physical coercion
C. Lack of practical choice
Explanation: The first element in DSND Subsea v PGS is that the victim had no realistic alternative but to agree.
What is the appropriate remedy where economic duress is established?
A. Damages
B. Rectification
C. An injunction
D. Rescission
D. Rescission
Explanation: Duress makes the contract voidable, and the remedy is rescission, which undoes the agreement.
A builder refuses to continue work unless paid more than agreed, knowing the client is on a tight deadline. The client pays under protest. What does this suggest?
A. Legitimate commercial negotiation
B. Economic duress – illegitimate pressure
C. Frustration
D. Common mistake
B. Economic duress – illegitimate pressure
Explanation: The pressure involved a threat to breach the contract and lack of choice – classic economic duress.
A party agrees to new contract terms under pressure but waits 8 months before challenging. What is the legal consequence?
A. The claim is barred due to affirmation
B. The variation is void
C. The claim is stronger due to delay
D. The pressure becomes legitimate after signing
A. The claim is barred due to affirmation
Explanation: Delay in taking action may be taken as affirmation, which blocks rescission – as in Atlantic Baron.
Which case confirmed that economic duress requires a “but for” link between pressure and agreement?
A. Carillion v Felix
B. Huyton SA v Peter Cremer
C. Kolmar v Traxpo
D. DSND Subsea v PGS
B. Huyton SA v Peter Cremer
Explanation: The court held that the duress must be decisive, meaning the agreement would not have been made but for the pressure.
Which of the following undermines a claim of economic duress?
A. Protest made at the time of signing
B. The pressured party acted in reliance on the contract
C. The pressured party delayed unreasonably in bringing a claim
D. The pressurising party made an unlawful threat
C. The pressured party delayed unreasonably in bringing a claim
Explanation: Delay may result in affirmation, making the contract enforceable despite earlier duress.
Which factor does not normally indicate illegitimate pressure in economic duress?
A. Lawful threat made in good faith
B. Threat to breach a contract
C. Demand for unjustified extra payment
D. Bad faith pressure by a contractor
A. Lawful threat made in good faith
Explanation: Lawful pressure made reasonably and in good faith does not usually count as illegitimate pressure.
Company X demanded extra payment from Company Y shortly before a tight deadline, knowing Y would suffer losses otherwise. Y objected in writing before paying. What strengthens Y’s claim?
A. Their willingness to pay
B. The absence of financial loss
C. The fact that the contract was oral
D. Their written protest at the time
D. Their written protest at the time
Explanation: As in Carillion v Felix, protest supports a claim that the agreement was made under duress, not voluntarily.
