Vitiating Factors - Economic Duress P3 Flashcards
What is economic duress
A ground where the wronged party can set aside a contract on the basis of being coerced by the financial situations involved
What happens when economic duress has been found to have taken place
Contract is set aside and part coerced should be relieved of their obligations - renders contract voidable
What are the 3 main elements of economic duress
Economic pressure
Illegitimate
Significant cause
Which case established the 3 elements of economic duress
PIAC v Times Travel (2021)
What is meant by economic pressure as an element of economic duress
D applied pressure to C which was of such a detrimental financial nature to them, left with no valid alternative
What did The Siboen and the Sibotre (1976) show for economic pressure
Ordinary commercial pressure is not enough to porve economic duress
What is meant by Pressure was illegitimate as an element of ecnomic duress
Ilegitimate = not authorised by the law or not in accordance with accepted standards or rules
No single test - a threat of a breach of contract or other civil will be sufficent
What are the factors considered for the element of pressure must me illigitimate
Whether or not c had a reasonable alternative
Whether the threat was a grave one
Whether or not they protested
The Atlantic Baron
Compulsion of will
Which case established the factors to decide if a party had acted under duress
Pao On V Lau Yin Long (1980)
What are the 3 factors to decide if a party has acted under duress according to Pao On V Lau Yin Long (1980)
1) Did the person claiming to be coered protest
2) Was there an alternative
3) Were steps taken to avoid the contract after entering it
What did the case of The Universal Sentinel (1983) show
HLs identified two elements of economic duress:
1) compulsion of the will - absence of choice
2) illegitimacy of the pressure
Why did C lose the claim in the case of CTN Cash & Carry V Gallagher (1993)
The threat to withdraw credit facilities for not paying for the stolen cigs was not illegitimate as there was a term in the contract that stated that they could withdraw the credit facilities at any time - caviat emptor
Which case showed that the pressure applied was illegitimate due to not having enough time and having to pay almost double to get the goods in time
Atlas Express V KAFCO (1989)
What is meant by pressure must be a ‘significant cause’ as an element for economic duress
Economic pressure must be significant cause as to the agreement - does not need to be the only cause but must pass the ‘but for’ test
