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Duress

Previous: Consideration

If a contract is obtained by improper pressure, it may be a voidable contract due to the presence of economic duress. This means that the contract is a binding contract until the party who acted under duress voids the contract in legal proceedings. There are two elements to duress:

  • Illegitimate pressure
  • Coercion

Illegitimate pressure

In the case of Universe Tankships of Monrovia v International Transport Workers Federation [1983], it was suggested that anything illegal constituted illegitimate pressure, but lawful threats may also be illegitimate. As was shown in CTN Cash and Carry v Gallagher [1954], a threat to enforce a contract does not amount to duress, however a threat to break a contract, as in North Ocean Shipping v Hyundai Construction [1979] can constitute duress.

Coercion

If illegitimate pressure is applied, this must coerce the will of a party to constitute duress. In Pau On v Lau Yiu Long [1980], Lord Scarman talked of vitiation of consent as giving rise to duress. In this case, several factors were outlined to help identify a claim for duress: did the claimant protest; did they have an alternative option; did they obtain independent advice or did they take steps to avoid the contract? Furthermore, in R v Attorney General for England and Wales [2003], duress was not found where a contract of employment was signed to prevent demotion; there was no coercion of the claimant’s will, despite the potential threat.

Consideration and duress

It is said that if the complicated doctrine of consideration were relaxed, duress would fill the gap which was left. Due to its complexity, it might be easier to use duress rather than consideration in a claim to void a contract. In Atlas Express v Kafco [1989], where the claimant haulage company underestimated the cost to deliver baskets to Woolworths, the defendants successfully argued both that Atlas express had provided no consideration for their promise to pay more and that they had promised the higher price under duress to prevent them becoming bankrupt.

Next: Estoppel

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