Economic Duress and Consideration Flashcards
Which of the following is true about consideration in a variation of a contract?
A. Consideration is not required in contract variations
B. Consideration must always be monetary
C. Consideration is only required when a contract is signed under seal
D. Doing what you were already contractually bound to do is not good consideration
D. Doing what you were already contractually bound to do is not good consideration
Explanation: As established in Stilk v Myrick, simply repeating existing duties does not amount to valid consideration for a new promise.
What is the effect of economic duress on a contract variation?
A. It renders the variation void automatically
B. It has no effect if consideration is present
C. It converts the contract into a deed
D. It makes the variation voidable
D. It makes the variation voidable
Explanation: Duress does not void a contract automatically but makes it voidable at the option of the pressured party.
A contractor is promised more money to finish a job they were already hired to do. They finish it, but do not do anything extra. Is the promise to pay more enforceable?
A. Yes, because the contract was completed
B. No, because there was no fresh consideration
C. Yes, because finishing the work is always sufficient
D. No, unless the variation was signed under duress
B. No, because there was no fresh consideration
Explanation: If the contractor did no more than their original obligation, there is no new consideration.
A subcontractor is falling behind. The main contractor agrees to pay more to get the work finished quickly, avoiding penalty clauses. Is there good consideration?
A. No, because consideration must be financial
B. Yes, because avoiding penalty clauses is a practical benefit
C. No, because the original work was not completed
D. Yes, if the subcontractor was under duress
B. Yes, because avoiding penalty clauses is a practical benefit
Explanation: As in Williams v Roffey Bros, practical benefit (such as avoiding penalties) may count as valid consideration.
X threatens to stop work unless Y agrees to pay more. Y agrees under pressure, but X does exactly what was originally agreed. Is the new payment enforceable?
A. No, because there is no consideration and the agreement was obtained through duress
B. Yes, because consideration was implied
C. Yes, because duress does not apply in commercial contracts
D. No, because consideration is not required when parties renegotiate
A. No, because there is no consideration and the agreement was obtained through duress
Explanation: If X did nothing extra and used illegitimate pressure, the variation lacks consideration and is voidable due to duress.
A party agrees to a variation after being pressured, but receives a practical benefit. Which of the following best reflects the legal position?
A. Practical benefit always overrides duress
B. The agreement is enforceable unless there’s a protest
C. Practical benefit is irrelevant if the promise was extracted by duress
D. Consideration removes the need for intention to create legal relations
C. Practical benefit is irrelevant if the promise was extracted by duress
Explanation: Even if practical benefit is present, duress invalidates the promise – the court will not uphold coerced agreements.
Which case first introduced the idea that practical benefit can amount to valid consideration?
A. Hartley v Ponsonby
B. Stilk v Myrick
C. Williams v Roffey Bros
D. Atlas Express v Kafco
C. Williams v Roffey Bros
Explanation: In this case, the court held that practical benefit, such as avoiding penalties or securing timely performance, could be good consideration.
A sailor agrees to continue a voyage after some crew desert, and is promised more money. He is taking on more duties than before. Is the variation enforceable?
A. Yes, because there is additional effort
B. No, because the ship was already at sea
C. No, because the promise was oral
D. Yes, but only if agreed in writing
A. Yes, because there is additional effort
Explanation: As in Hartley v Ponsonby, doing more than originally agreed can be valid consideration.
