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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...

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