Force and Fear and other Grounds of Challenge to a Contract Flashcards
What is the effect of a finding of force and fear in relation to the signing of a contract?
Traditionally the contract is void. If consent is given reluctantly rather than annulled the contract may be voidable under another ground of challenge rather than void due to force or fear.
What are the requirements for a finding that force and fear renders a contract void?
There does not have to be force and fear, it is the subversion of consent by fear that is important, force is just a means of producing the fear (Priestnell v Hutcheson). The fear must be sufficient to annul consent.
What are the requirements for the threat to be actionable and the authority for them?
It must be illegitimate/illegal (Earl of Orkney v Vinfra) or used to obtain an illegitimate result (Priestnell v Hutcheson).
The threat can be from a third party, what is the authority for this?
Trustee Savings Bank v Balloch 1983. Note that the threat may also be directed towards a third party such as a child or other family member though Balloch is not authority for this.
What are the requirements for the fear to be actionable and the authorities for these requirements?
-The fear must not be “vain or foolish” (Hunter v Bradford Property Trust).
-The test is subjective and takes into account the victim’s special factors such as age and relation to the person applying the pressure. The subjective fear/pressure put on the person “must be such as would overpower the mind of a person of ordinary firmness.” so there’s also an objective element. (Hislop v Dickson Motors)
Is economic duress an illegitimate threat in Scots Law?
So long as the pressure does not involve unlawful means people are entitled to use their full economic power to strike the best possible bargain possible for them (Allen v Flood)>
What are the requirements for Facility and Circumvention?
Facility, Circumvention and Lesion (disadvanatage). Facility and Circumvention renders a contract void.
What are the requirements for facility?
One party must be facile at the point the contract is formed (McGilvary v Gilmarton). This can be due to old age, physical weakness, mental weakness or another vulnerability such as bereavment.
What amounts to lesion?
Lesion is usually financial. Financial disadvantage to weaker party or financial advantage to stronger party suffices.
What amounts to circumvention?
The stronger party must take advantage of the weaker party’s facility (Ross v Gosselins Exrs). Actual deceit is not necessary, there must only be some form of fraudulent behaviour (e.g. undue influence) (Anderson v Beacon Fellowship). The greater the degree the facility the less circumvention must be proved and vice versa (Mackay v Campbell)
What is the consequence of facility and circumvention?
Contract is voidable subject to usual restrictions.
Other than force and fear what are the three other grounds for challenge of a contract?
Facility and Circumvention, Undue Influence and Abuse of Good Faith
