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FACULTY OF LAWS

LAW OF CONTRACT 2014-2015

DURESS
1. Introduction

Void contract not binding, not enforceable


Voidable contract it is binding until somebody brings a claim and proves that the contract should
be voided
proved duress makes a contract voidable
English law doesnt have a rule that parties should negotiate in a honest, cooperative or faithful
way
question of what amount of pressure should be allowed- what constitutes duress?
decision making process is corrupted by mistake, coercion, undue influence this is not duress

Barton v Armstrong [1976] AC 104 (PC) 121 (Lord Wilberforce and Lord Simon): in life, including the
life of commerce and finance, many acts are done under pressure, sometimes overwhelming pressure, so
that one can say that the actor had no choice but to act. Absence of choice in this sense does not negate
consent in law: for this the pressure must be one of a kind which the law does not regard as legitimate.
Thus, out of the various means by which consent may be obtained advice, persuasion, influence, inducement, representation, commercial pressure the law has come to select some which it will not accept as
a reason for voluntary action: fraud, abuse of relation of confidence, undue influence, duress or coercion.
2. Duress and Consent
M Chen-Wishart, Contract Law (2nd edn OUP, Oxford 2008) 321: If you tell me to hand over 10,000
or be horribly maimed, my decision to hand over the money is very real indeed. I know what I am
agreeing to, I intend to agree, and I very much want to agree. The real objection is not that I did not
consent, but that you induced my agreement by illegitimate pressure.
3 . Types of Duress

Duress to the person


Duress to goods
Economic duress

4. Duress to the Person


Threatens physical harm to a person
Barton v Armstrong (1976) AC 104 (PC) 119 (Lord Cross): If Armstrongs threats were a reason for
Bartons executing the deed he is entitled to relief even though he might well have entered into the
contract if Armstrong had uttered no threats to induce him to do so.

LLB Law of Contract

2014-2015

But for causation would he have signed the contract but for the durres? appeared he would
have entered in the contract anyway
Privy council says the Australian court used the wrong test the onus is on Armstrong to prove
that the illegitimate pressure did not matter
Question: did the illegitimate pressure affect the thought process in any way/to any extent

5. Duress to Goods
Refuses to give other persons goods back unless they enter a contract
Astley v Reynolds (1731) 2 Str 915
6. Economic Duress
illegitimately pressurises another person to act in a way which might be detrimental to them
Dimskal Shipping Co SA v ITWF (The Evia Luck) [1992] 2 AC 152 (HL) 165 (Lord Goff): it is now
accepted that economic pressure may be sufficient to amount to duress, provided at least that the
economic pressure may be characterised as illegitimate and has constituted a significant cause inducing
the claimant to enter into the relevant contract.
6.1. Illegitimate Pressure
requirement = illegitimate pressure caused one to enter into a contract
6.1.1. More than ordinary commercial pressure
Universe Tankships Inc of Monrovia v ITFW (The Universe Sentinel) [1983] 1 AC 366 (HL) 384 (Lord
Diplock): commercial pressure, in some degree, exists wherever one party to a commercial transaction is
in a stronger bargaining position than the other party.
DSND Subsea Ltd v Petroleum Geo Services AS [2000] BLR 530 [131] (Dyson J): In determining
whether there has been illegitimate pressure, the court takes into account a range of factors. These include
whether there has been an actual or threatened breach of contract; whether the person allegedly exerting
the pressure has acted in good or bad faith; whether the victim had any realistic practical alternative but to
submit to the pressure; whether the victim protested at the time; and whether he affirmed and sought to
rely on the contract. These are all relevant factors. Illegitimate pressure must be distinguished from the
rough and tumble of the pressures of normal commercial bargaining.
6.1.2. Good and bad faith
A Burrows, The Law of Restitution 2nd edn (2002) 233: A threatened breach of contract should be
regarded as illegitimate if concerned to exploit the claimants weakness rather than solving financial or
other problems of the defendant. To this can be added two supplementary or clarificatory ideas a threat
should not be considered illegitimate (made in bad faith) if the threat is a reaction to circumstances that
almost constitute frustration [nor] if it merely corrects what was always clearly a bad bargain.
CTN Cash and Carry Ltd v Gallaher Ltd [1994] 4 All ER 714 (CA) 717 (Steyn LJ): it might be
particularly difficult to establish duress if the defendant bona fide considered that his demand was valid.
In this complex and changing branch of the law I deliberately refrain from saying never. But as the law
stands, I am satisfied that the defendants conduct in this case did not amount to duress.

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2014-2015

Huyton SA v Peter Cremer GmbH & Co [1999] 1 Lloyds Rep 620, 637 (Mance J): it is difficult to accept
that illegitimate pressure applied by a party who believes bona fide in his case can never give grounds for
relief.
6.1.3. Threatened acts need not be unlawful
Universe Tankships Inc of Monrovia v ITWF (The Universe Sentinel) [1983] 1 AC 366 (HL) 401 (Lord
Scarman): The origin of the doctrine of duress in threats to life or limb, or to property, suggests strongly
that the law regards the threat of unlawful action as illegitimate, whatever the demand. Duress can, of
course, exist even if the threat is one of lawful action: whether it does so depends upon the nature of the
demand. Blackmail is often a demand supported by a threat to do what is lawful, e.g. to report criminal
conduct to the police. In many cases, therefore, What [one] has to justify is not the threat, but the
demand: see per Lord Atkin in Thorne v Motor Trade Association [1937] AC 797, 806.
6.1.4. Threatened breaches of contract
B&S Contracts and Design Ltd v Victor Green Publications Ltd [1984] ICR 419 (CA) 428 (Kerr LJ):
a threat to break a contract unless money is paid by the other party can, but by no means always will,
constitute duress; on the facts of the case it amounted to illegitimate pressure.
Cf DSDN Subsea Ltd v Petroleum Geo-Services ASA [2000] BLR 530 [134] (Dyson J): on the facts of the
case the threat was reasonable behaviour by a contractor acting bona fide in a very difficult situation and
so was not illegitimate pressure.
6.1.5. Contractual variations and the past consideration rule
Stilk v Myrick (1809) 2 Camp 317
Williams v Roffey Bros & Nicholls (Contractors) Ltd [1991] 1 QB 1
6.2. Causation
6.2.1. Causation test
Dimskal Shipping Co SA v ITWF (The Evia Luck) (No 2) [1992] 2 AC 152 (HL) 165 (Lord Goff):
a significant cause.
Huyton SA v Peter Cremer GmbH & Co [1999] 1 Lloyds Rep 620, 636 (Mance J): the illegitimate
pressure must have been such as actually caused the making of the agreement, in the sense that it would
not otherwise have been made either at all or, at least, in the terms in which it was made.
Kolmar Group AG v Taxpo Enterprises Pty Ltd [2012] EWHC 113 (Comm) [92] (Christopher Clarke J):
Economic pressure can amount to duress, provided it may be characterised as illegitimate and has
constituted a but for cause inducing the claimant to enter into the relevant contract.
6.2.2. Reasonable alternatives
Kolmar Group AG v Taxpo Enterprises Pty Ltd [2012] EWHC 113 (Comm) [92] (Christopher Clarke J):
it is relevant to consider whether the claimant had a real choice or realistic alternative and could, if it
had wished, equally well have resisted the pressure and, for example, pursued practical and effective legal
redress. If there was no reasonable alternative, that may be very strong evidence in support of a
conclusion that the victim of the duress was in fact influenced by the threat.