Economic Duress - Paper 3 Flashcards
What is Economic Duress?
When someone enters into a contract as a result of financial threats
What happens if economic duress is established?
It makes the contract voidable, meaning it will continue until the innocent party avoids it
What was held in Universe Tankships v ITWF?
The key requirements for economic duress are that there must be pressure which is illegitimate, leaves the victim with no real choice and causes them to enter into the contract
Which case set out four key stages for a claim in economic duress?
Pao On v Lau Yiu Long
What is the first factor under Pao On?
Did the person claiming to be coerced protest about the pressure
What is the second factor under Pao On?
Did that person have any other available course of action that was reasonable
What is the third factor under Pao On?
Was he or she independently advised before taking the action
What is the final factor under Pao On?
After entering into the contract, did he or she take steps to make the contract void
When will the case of CTN Cash & Carry v Gallagher apply?
When the action threatened is a lawful one and therefore may not be economic duress
What are the remedies for economic duress?
Restitution of property or money extracted under duress, meaning the person is restored to the position they would have been in if not for the improper action of another
