Vitiating factors- economic duress

Question 1

Define economic duress

Answer 1

Illegitimate pressure/threat to damage business financially, placed on party to enter contract

Question 2

Whats the leading case for economic duress and what does it give us

Answer 2

Pakistan v international airline corporation v times travel- says economic duress requires proof of 3 elements

Question 3

What are the 3 elements of economic duress

Answer 3

1. Illegitimate pressure on suffering party
2. Pressure is significant cause of the making of the contract
3. C had no reasoable alternative to giving into the pressure

Question 4

Define illegitimate pressure

Answer 4

Economic pressure/threat from D that wasn’t legally, commercially or socially justified

Question 5

In Pao on v lau yiu long what was illegitimate pressure described as

Answer 5

A factor which would be regarded as a coercion of his will so as to vitiate his consent

Question 6

What case was an example of when the pressure given wasn’t illegitimate

Answer 6

CTN cash and carry v Gallagher- acted in good faith

Question 7

What case named situations where pressure can be lawful, and what were these situations

Answer 7

Pakistan international airline corp v times travel
- d used knowledge of c’s criminal activity to threaten them
- d used reprehensible means to manoeuvre c into position of vulnerability to force c to waive claim

Question 8

Describe the second element of economic pressure (pressure is significant cause of the making of the contract)

Answer 8

The pressure from the d caused the c to enter the contract

Question 9

What case is used for pressure must be significant cause of the making of the contract, what happened in the case

Answer 9

Universe tank ships v ITWF- contract not enforceable if there is economic pressure

Question 10

Explain the 3rd element of economic duress (c had no reasoable alternative to giving into pressure)

Answer 10

• other competitor charge more
• not submitting to pressure would have created claims for damages with other party

Question 11

What case was used for the c having no reasonable alternative to submitting to the pressure

Answer 11

B + S contractors v victor green publications

Question 12

What are the remedies for economic pressure

Answer 12

• contract voidable
• c can repudiate or affirm contract
• court can order rescission- put c in position as if contract never happened (entitlement lost if c affirms)