Economic Duress

Question 1

Williams v Roffey Bros

5 Factors

Answer 1

1. contract to do work/supply goods & services in return for payment;
2. B doubts whether A will complete obligations
3. B promises additional payment if A completes obligation on time
4. As a result of giving promise, B obtains practical benefit/obviates a disbenefit
5. B’s promise not given as a result of economic duress or fraud

Question 2

Definition of Duress

Answer 2

Duress is some sort of violence, illegitimate threat or pressure. This threat must be improper or illegitimate

Question 3

Carrillion Construction v Felix

Answer 3

To establish duress, innocent party must establish that there has been:

• an illegitimate threat or pressure
• threat/pressure left him with no practical choice
• threat/pressure was a significant factor in inducing him to enter contract/variation

Question 4

Factors to consider on whether there is an illegitimate threat or pressure

Answer 4

i. whether there was actual or threatened breach of contract;
ii. whether the person allegedly exerting the pressure has acted in good or bad faith;
iii. whether victim has any realistic practical alternative but to submit to pressure;
iv. whether victim protested at the time; and
v. whether victim affirmed and sought to rely on the contract

Question 5

Threat/pressure need not be the only reason why the innocent party entered the contract

Answer 5

Barton v Armstrong

Question 6

Duress may also be used as defence if the other party tries to enforce a variation of the contract

Answer 6

Atlas Express v Kafco

Question 7

Effect of Duress

Answer 7

if conditions 1-4 of Williams v Roffey met, but not condition 5, there is consideration but also economic duress.
Contract is voidable

Question 8

If there is duress, claimant has choice to rescind or affirm

Answer 8

Adam Open v Mitras

Question 9

Remedy available

Answer 9

Rescision only

Question 10

Innocent party must inform other party that it wants to rescind

Answer 10

If can’t be found or refuses to return money/property, they must inform the police or apply for court order

Question 11

Delay is a bar to rescission

Answer 11

The Atlantic Baron

Question 12

Affirmation is a bar to rescission

Answer 12

The Atlantic Baron

Question 13

If an innocent party has acquired an interest in the property before the contract is voided

Answer 13

Then there is a bar to rescission

Question 14

If it is impossible to substantially return goods/property

Answer 14

Then there is a bar to rescission