Term
| What does duress involve? |
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Definition
| Duress involves one party coercing another party into a contract so that they do not enter it of their own free will |
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Term
| If a contract is entered in to under duress, what happens to the contract? |
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Definition
It is voidable - but not void
Therefore, it is a vitiating factor (the court will give pause for thought before enforcing a contract) |
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Term
| How can a contract entered in to under duress come to an end? |
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Definition
| Where the wronged party takes action to rescind it. |
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Term
| What are the three types of duress? |
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Definition
Duress to the person
Duress to goods
Economic duress |
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Term
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Definition
| A WRONGFUL THREAT OF IMPRISONMENT CONSTITUTES DURESS TO THE PERSON |
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Term
| What is the leading case on duress to the person? |
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Definition
| Barton v Armstrong [1976] |
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Term
| Barton v Armstrong [1976] |
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Definition
LEADING CASE ON DURESS TO THE PERSON
D made threats of physical violence to the C in order to get him to sign an agreement & quit as chairman of a company.
HELD -
1) DURESS TO THE PERSON NEED NOT BE THE ONLY REASON THE WRONGED PARTY ENETERED IN TO THE CONTRACT - IT CAN BE JUST ONE OF THE REASONS
2) BoP ON THE AGGRESSOR TO SHOW THAT HE a) DIDN'T DURESS b) DURESS DIDN'T CONTRIBUTE TO WRONGED PARTY'S DECISION TO EXECUTE THE AGREEMENT |
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Term
| Which case held that 'duress to the person need only be ONE factor influencing the victim's decision to agree' |
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Definition
| Barton v Armstrong [1976] |
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Term
| Which of 'Duress to the person' and 'Economic Duress' is easier to prove? |
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Definition
Duress to the person - because duress need only be ONE factor that influenced victim's actions.
Economic duress requires the stringent 'but for' test to be established. |
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Term
| Huyton SA v Peter Cremer GmbH & Co [1999] |
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Definition
'BUT FOR' TEST REQUIRED TO ESTABLISH ECONOMIC DURESS
NO OTHER REASONABLE ALTERNATIVE BUT TO SUBMIT TO THE THREAT
'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. The pressure must have been decisive or clinching.
D delivered wheat to C - on doing so, D failed to provide proper documentation
C took delivery, but refused to pay, due to incorrect documentaion
Before going to arbitration, C agreed to pay, provided that the D covered the shipping costs of the wheat (which C would otherwise have had to pay)
D later contended that he had entered in to the agreement under ED
HELD - D was unable to satisfy the but-for test. Although the D could show illegitimate pressure, it could not show that the pressure was the significant cause of its entering into the agreement. |
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Term
| Why is there a lower threshold for establishing Duress to the Person (co/ Economic Duress) |
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Definition
Because duress to the person is much more serious - it is a crime - you can't just threaten people's lives
it ain't good :0 |
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Term
| In which case was the idea that economic duress might render a contract voidable first given formal recognition? |
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Definition
| The Siboen and The Sibotre [1976] |
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Term
| What are the two ways in which 'duress' can be used in legal proceedings? |
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Definition
a) After completion of the contract, party can go to court to have it set aside because it was entered in to under duress.
b) after other party has performed their contractual obligation, you can refuse to pay, go to court and use the defence of duress. |
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Term
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Definition
| Any threat to hold on to, take, damage, destroy etc. another's goods, unless the other person performs some act for you |
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Term
| Which case first recognised duress to goods as a possible doctrine? |
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Definition
| The Siboen and the Sibotre [1976] |
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Term
| How was duress to goods recognised in Siboen and the Sibotre [1976] |
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Definition
| Obiter - Judge said that if someone threatens to burn your house down, or slash your valuable painting unless you entered into a contract, the law wouldn't uphold the agreement. |
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Term
| Why is Stilk v Myrick relevant to the issue of economic duress? |
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Definition
| As Stilk v Myrick says that performing an existing contractual obligation cannot be good consideration for extra money. Therefore, prevents duress. (used before duress doctrine was developed) |
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Term
| Why is Williams v Roffey relevant to the issue of duress? |
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Definition
In order for the exemption provided by this case to apply, there has to have been no ED. IN WILLIAMS V ROFFEY, ROFFEY APPROACHED WILLIAMS OF THEIR OWN ACCORD AND OFFERED THEM EXTRA MONEY.
Exemption in this case = promise to pay more for performance of an existing contractual obligation can be enforceable where - Payee gains a practical benefit, or obviates a disbenefit & Payee's promise to pay more is not given as a result of fraud or duress (e.g. where payee approaches and freely offers more) |
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Term
| If the court agrees to set aside the contract on the grounds of duress, what part of the contract is set aside? (in the case where there was already a contract, but there was duress to alter the contract in some way). |
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Definition
| The variation / the agreement to pay more. The rest of the contract is not set aside as there is nothing wrong with this part of the contract. |
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Term
| What was originally used before duress to strike out unfair practice? |
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Definition
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Term
| Adam Opel v Mitras Automotive [2008] |
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Definition
FORMAL RECOGNITION THAT THE COURTS NOW USE DURESS, INSTEAD OF CONSIDERATION, TO ELIMINATE UNFAIR PRACTICE.
C made vans, D made van bumpers
D supplied C with bumpers
C informed D that they had re-designed their vans and in 6-months would no longer require bumpers
D told C that if they wanted bumpers for the next 6-months, they would have to pay upfront & the price of the bumpers had gone up
C agrees & pays & gets bumpers for the next 6-months
However, after paying, Cs then sued D for the return of the money, claiming duress
HELD - it was duress
COURT FORMALLY ACKNOWLEDGED THAT WHERE THE COURTS USED TO USE CONSIDERATION TO PREVENT UNFAIR PRACTICE, THEY WOULD NOW USE DURESS. |
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Term
| Which two cases are fundamental to the 'historical' test for establishing ED? |
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Definition
The Siboen and the Sibotre [1976]
Pao On v Lau Yiu Long [1980] |
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Term
| The Siboen and the Sibotre [1976] - on duress |
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Definition
FIRST CASE TO FORMALLY RECOGNISE ED
ED REQUIRES - a) COERCION OF THE WILL SO AS TO VITIATE CONSENT (V must have had no alternative but to agree) b) THE V MUST PROTEST c) the agreement entered in to under the alleged duress was not seen by the wronged party as being 'settled and binding'w |
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Term
| After 'The Siboen & The Sibotre' and 'Pao On', how did the concept of economic duress develop? |
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Definition
SHIFT FROM NON-CONSENT TO FOCUS ON TYPE OF PRESSURE EXERTED
The courts realised that a focus on 'nil consent' was wrong, as technically, the V consents. The V is confronted with the the need to choose between the lesser of two evils, therefore, their consent is more emphatic than it would be without the duress. (If someone tells you that they will hit you with a baseball bat unless you pay them £50, your consent to pay them will be quite forthcoming. Instead, the courts decided that the focus should be on the type of pressure exerted, illegitimate vs legitimate. |
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Term
| Which case set the causation test for establishing ED? |
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Definition
| Huyton SA v Peter Cremer [1999] |
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Term
| Huyton SA v Peter Cremer [1999] |
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Definition
| SET THE CAUSATION TEST FOR ED. BUT-FOR TEST - THE ED MUST HAVE BEEN THE SIGNIFICANT CAUSE OF THE V'S CONSENT. |
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Term
| Which case provided the current definition of the test for ED? |
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Definition
| DSND Subsea v Petroleum Geo Ltd [2000] |
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Term
| What is the current test for ED, as set out in DSND Subsea v Petroleum Geo Ltd [2000] |
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Definition
There must be pressure resulting in:
a) LACK OF PRACTICAL CHOICE for the victim
b) the pressure must be ILLEGITIMATE
c) the pressure must be a SIGNIFICANT CAUSE inducing the V to enter the contract |
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Term
| Which two cases affirmed the current test for ED? |
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Definition
Carillion Construction Ltd v Felix Ltd [2010]
Kolmar Group AG v Traxpo Enterprises Ltd [2010] |
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Term
| Carillion Construction Ltd v Felix Ltd [2010] (on ED basic) |
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Definition
| AFFIRMED THE TEST FOR ED AS SET OUT IN DSND SUBSEA PETROLEUM |
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Term
| Kolmar Group AG v Traxpo Enterprises Ltd [2010] (on ED basic) |
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Definition
| AFFIRMED THE TEST FOR ED AS SET OUT IN DSND SUBSEA PETROLEUM |
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Term
| In a case where party X pays party Z additional money to perform an existing contractual obligation, and party X gains a practical benefit from doing so... what would you do? |
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Definition
Williams v Roffey [1990] - practical benefit, HOWEVER, there must be no ED. IN WILLIAMS V ROFFEY, ROFFEY APPROACHED WILLIAMS OF THEIR OWN ACCORD AND OFFERED THEM EXTRA MONEY.
If there is ED, apply test for ED as set out in DSND Subsea Petroleum [2000] |
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Term
| Which cases can be used to assess whether there was a 'lack of practical choice for the victim'? |
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Definition
1) DSND Subsea
2) B & S Contracts & Design Ltd v Victor Green Publications [1984]
3) Atlas Express v Kafco Ltd [1989]
4) Carillion Construction Ltd v Felix UK Ltd [2001] |
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Term
| DSND Subsea [2000] - on 'lack of practical choice for the victim' |
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Definition
| Whether the victim had any realistic practical alternative but to submit - Dyson J |
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Term
| B & S Contracts & Design Ltd v Victor Green Publications [1984] - on 'lack of practical choice for the victim' |
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Definition
EXAMPLE OF A CASE IN WHICH THE V LACKED ANY PRACTICAL CHOICE
ALSO EXAMPLE OF A CASE IN WHICH IMMEDIATE ACTION TO AVOID THE CONTRACT WAS TAKEN
OBITER - 'there would be no economic duress if there been an adequate remedy available to them (other than entering in to the contract) e.g. an injunction.'
Ideal home show case
Ds had hired Cs to erect stands at the ideal home show
Ds had hired out the stands to different companies (lots of commercial pressure to get the stands erected)
The day before the show, C said they wouldn't put up the stands, unless D paid more money (made it clear that money was to be paid on top of what they were already owed)
In order to ensure they got the extra money, they demanded it upfront
D paid the extra money upfront
However, after the show, when the Cs sent the invoice for the remaining money due under the contract, Ds subtracted the amount they had already paid them
cs sued Ds for the rest of the money
Ds used duress as a defence
HELD - there was ED - the Ds had lacked any practical choice, other than to pay the extra money |
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Term
| Atlas Express v Kafco Ltd [1989] - on lack of practical choice |
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Definition
EXAMPLE OF A CASE IN WHICH THE V LACKED ANY PRACTICAL CHOICE
Ds made baskets, Cs signed cotnract to deliver baskets. Baskets were xmas hampers, and on the 20th December, Cs refuse to deliver the baskets unless Ds sign a variation clause which would have given the Cs more money.
Lack of practical choice because it was 4 days before xmas,unlikely to be able to find another company to deliver. |
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Term
| Carillion Construction Ltd v Felix UK Ltd [2001] - on lack of practical choice for the victim |
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Definition
EXAMPLE OF A CASE IN WHICH THE V LACKED ANY PRACTICAL CHOICE
D delivers cladding to C
D is late in delivering the cladding
C constructing building for 3rd party which has a deadline and penalty clauses
C complains about the delay
Ds say 'we will be even later unless you pay us more'
Cs agreed to pay more & paid more
Cs took Ds to court afterwards
HELD - there was lack of practical choice - the Ds had known that the C had lots of contracts they had to fulfill + knew of possible penalty clauses + they knew that it would be impossible for the C to find another contractor in time... therefore = no practical choice but to pay = ED |
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Term
| In DSND, Lord Dyson provides factors which must be considered in order to discern whether there is illegitimate pressure. What are these factors? |
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Definition
1) Threatened breach of contract?
2) Good or bad faith?
3) Protest?
4) Affirmation? |
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Term
| In order to determine whether there is illegitimate pressure, an important consideration is whether there was a threatened breach of contract. Which cases can be used to explore this factor? |
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Definition
Atlas Express Ltd v Kafco Ltd [1989]
Carillion Construction Ltd v Felix [2001]
B&S Contracts & Design v Victor Green [1984] |
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Term
Atlas Express Ltd v Kafco Ltd [1989]
- on illegitimate vs legitimate pressure (threatened breach of contract) |
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Definition
ILLEGITIMATE THREAT OF BREACH OF CONTRACT, WITH THE ILLEGITIMATE PURPOSE OF ACQUIRING MORE MONEY (which you have given no consideration for) = ILLEGITIMATE PRESSURE
D made baskets
D landed a huge contract to supply Woolworths with Xmas baskets
Cs = delivery company who are going to take Ds baskets to Woolworths
Ds & Cs negotiate a price on the basis of price per basket
Ds expect thousands of baskets, however, when they go to collect, there are only 200
The next day (20th December), Cs asked Ds to vary contract to pay per lorry load
Cs said that if they didn't pay per lorry load, they wouldn't deliver the basket
Ds agree
However, when Cs invoice Ds, Ds pay Cs the price per basket
Cs sue for outstanding balance
HELD - illegitimate threat for an illegitimate purpose... illegitimate purpose of acquiring more money without giving any extra consideration |
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Term
| B&S Contracts & Design v Victor Green [1984] - on illegitimate vs legitimate pressure (threatened breach of contract) |
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Definition
Ideal home show case
Cs threatened to breach the contract unless they got more money.
HELD - illegitimate threat for illegitimate purpose - acquiring more money without giving any additional consideration. |
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Term
| Carillion Construction Ltd v Felix [2001] - on legitimate vs illegitimate pressure (threatened breach of contract) |
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Definition
HELD - threats to withhold deliveries, when under a contractual obligation to prevent delays = illegitimate threat
illegitimate purpose = to acquire more money without giving any fresh consideration. |
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Term
| Is breach of contract a legitimate threat, or an illegitimate threat? |
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Definition
| It is an illegitimate threat |
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Term
| Will the illegitimate threat of breaching a contract always be held to = illegitimate pressure = ED? |
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Definition
| NO - it has to be an illegitimate threat for an ILLEGITIMATE PURPOSE. See CTN v Gallagher [1994] & DSND |
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Term
| DSND Subsea v Petroleum Geo [2010] - illegitimate vs legitimate pressure (legitimate purpose & good faith) |
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Definition
WHERE THERE IS ILLEGITIMATE PRESSURE FOR A LEGITIMATE PURPOSE, THERE WILL BE NO ED
ILLEGITIMATE PRESSURE MADE IN GOOD FAITH = NO ED
Also...IF THE V WAITS TOO LONG TO PROTEST, THEY ARE TAKEN TO HAVE AFFIRMED
Cs = commerical diving company
Ds = rig owner
Cs have contract to do work on Ds rig
Cs were concerned that there weren't good enough insurance cover in place to protect their divers when on Ds rig
Cs refused to send their divers, unless Ds got better insurance
Ds got better insurance, and Cs sent their divers
Ds carried on with the arrangements (enhanced insurance) for some time before bringing a claim to court
HELD - illegitimate threat for legitimate purpose. Also, in waiting so long to protest, Cs had affirmed |
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Term
| Which cases can be used to explore the illegitimate pressure factor of 'good or bad faith'? |
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Definition
DSND Subsea v Petroleum Geo [2000]
CTN v Gallagher [1994]
The Universe Sentinel [1983] |
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Term
| CTN v Gallagher [1992]- on ilegitimate pressure vs legitimate pressure (good faith / bad faith) |
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Definition
KEY - SHOWS THAT THE COURTS WILL NOT FIND DURESS UNLESS SOMETHING REALLY UNCONSCIONABLE HAS HAPPENED
A LEGITIMATE THREAT, DONE FOR AN ILLEGITIMATE PURPOSE, BUT DONE IN GOOD FAITH, NO ILLEGITIMATE PRESSURE
Cs buying cigarettes from D
Ds give Cs credit
lorry carrying cigarettes is stolen
D genuinely believed that Cs were responsible under the contract for the loss
Ds told Cs that they were not going to give the Cs anymore credit/contract with them, unless they paid for the loss
Cs felt they had no choice, so they paid
It then transpired that the Ds were responsible for the loss
Cs sued Ds for the return of the money
HELD -
Cs were not entitled to get the money back, because the threat was a lawful threat made in good faith (even though the threat had an illegitimate purpose)
Ds threat not to contract anymore = legitimate threat, they were under no obligation to do so. Also, Ds threat was done in good faith, as they believed the Cs owed the money.
Although making the threat to get the money gave the threat an illegitimate purpose, given the ligitimacy of the threat and good faith = no illegitimate pressure = no ED |
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Term
| The Universe Sentinel [1983] - on illegitimate pressure vs legitimate pressure (good faith / bad faith) |
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Definition
LEGITIMATE THREAT FOR ILLEGITIMATE PURPOSE - BAD FAITH = ED
ILLEGITIMATE PURPOSE BECAUSE... WHILST IT IS LEGITIMATE TO GO ON STRIKE, IT IS NOT LEGITIMATE TO GO ON STRIKE IN ORDER TO GET A LUMP SUM PAID INTO A WELFARE FUND = ILLEGITIMATE PURPOSE
Ds = shipworkers
LEGITIMATE THREAT FOR AN ILLEGITIMATE PURPOSE = ILLEGITIMATE PRESSURE = ED
Ds went on strike refused to let the Cs ship leave port until they paid them a) outstanding workers wages, and b) a lump sum into their welfare fund
Cs had no choice but to pay, because they had to get the ship out of port
HELD - striking is a legitimate act. However, you can only strike in relation to an employment dispute, you cannot strike in order to get a large sum paid in to a welfare fund. Therefore, getting the lump sum = illegitimate purpose (getting the oustanding wages = legitimate purpose). Therefore = ED |
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Term
| If there is no illegitimate pressure, can there be ED? |
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Definition
| YES - e.g. The Universe Sentinal - legitimate threat for an illegitimate purpose. |
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Term
| Which cases can be used to show that harsh commercial pressure, which doesn't amount to illegitimate pressure = no ED? |
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Definition
Alec Lobb v Total Oil [1983]
R v Attorney General of England and Wales [2003] |
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Term
| Alec Lobb v Total Oil [1983] |
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Definition
DRIVING A HARD BARGAIN DOES NOT AMOUNT TO ED
C = garage owner
C got all his petrol from D
C was having financial difficulties
C asked D if they could buy his garage and lease it back to him, thus giving him a lump sum to inject into business
D warned him that it was not a good business decision
C's solicitor was so outraged by the decision that he left the room
Ds agreed to do what C requested (under D's exceptionally competitive terms)
Cs financial difficulties continued & business begins to fail
C sued D for economic duress
HELD - no ED. No illegitimate pressure. There had been overwhelming financial pressures on the C, however no ED |
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Term
| R v Attorney General of England and Wales [2003] |
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Definition
NO OVERWHELMING PRESSURE = NO DURESS
CASE INVOLVING OVERWHELMING PRESSURE
C = ex SAS member
C wants to write a book about his experience in the SAS
However, C had signed the official secrets act
C tried to argue that he had signed under duress as he had been told that if he didn't sign he would be kicked out of the SAS
HELD - no ED. Legitimate pressure, even though it was overwhelming. Also for a legitimate purpose (protecting the country) Perfectly reasonable that you would have to sign the secrecy act. |
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Term
| The Atlantic Baron [1979] |
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Definition
FAILURE TO PROTEST / TAKE IMMEDIATE ACTION TO AVOID THE CONTRACT ENTERED INTO UNDER DURESS = AFFIRMATION OF THE CONTRACT = NO ED
IF THE EXCUSE FOR THE DELAY IS BECAUSE THE C WANTS TO ENSURE THE D FULFILLS OTHER CONTRACTUAL OBLIGATIONS, THIS WILL NOT BE A GOOD ENOUGH EXCUSE, AS IT IS NOT THE CLAIMANT'S JOB TO DO WHAT THE COURT SHOULD DO
D agreed to build The Atlantic Baron for the Cs for a fixed price
However, the value of the $ subsequently depreciated
Ds told Cs that they wouldn't finish building the ship unless the Cs paid them more
Cs expressed displeasure at this demand, but agreed to pay them
Cs took delivery of the ship in 1974
At the same time, the Ds had also been contracted to build another ship for the Cs. Through fear that the Ds would not complete building the second ship, the Cs held off on suing them for duress. The Cs therefore waited.
In 1975, the owners then sued to reclaim the extra money they had paid
HELD - court agreed that there was ED, however, because Cs waited so long, they were deemed to have affirmed the contract. Court held that w.r.t the Cs reason for waiting before claiming, it was not the Cs role to do what the court should do. e.g. if the C had sued and the D had refused to build the second ship, the courts would have forced the D to build the ship. It was not the role of the C to be tactical in order to get the second ship built. |
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Term
| Which cases can be used to show that failure to protest / take immediate action to avoid the contract (after agreeing to it) = no ED |
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Definition
The Atlantic Baron [1979]
DSND Subsea v Petroleum Group [2000]
Atlas Express Ltd v Kafco Ltd [1989]
B&S Contracts & Design v Victor Green [1984] |
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Term
| How can Atlas Express Ltd v Kafco Ltd [1989], and, B&S Contracts & Design v Victor Green [1984], be used to show that the test for ED requires 'immediate action to avoid the contract'? |
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Definition
| Because in both of these cases, the V of the duress didn't actually pay, and both made successful claims for ED. |
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Term
| What are the measures a party can take to take immediate action to avoid a contract entered into under duress? |
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Definition
a) Take immediate action yourself (e.g. don't pay), then use duress as a defence (Atlas Express & B&S Contracts)
b) Initiate legal proceedings ASAP (The Atlantic Baron) |
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Term
| What is the causation test for ED? |
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Definition
| But-for test - the ED must be THE significant cause of the V entering in to the agreement. |
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Term
| What are the measures a party can take to take immediate action to avoid a contract entered into under duress? |
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Definition
a) Take immediate action yourself (e.g. don't pay), then use duress as a defence (Atlas Express & B&S Contracts)
b) Initiate legal proceedings ASAP (The Atlantic Baron) |
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Term
| What is the causation test for ED? |
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Definition
| But-for test - the ED must be THE significant cause of the V entering in to the agreement. |
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Term
| If there is illegitimate pressure with an illegitimate purpose, will there be ED? |
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Definition
| YES - e.g. B&S contractors [1984] |
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Term
| If there is illegitimate pressure with a legitimate purpose, will there be ED? |
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Definition
| NO - e.g. DSND Subsea [2000] |
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Term
| How can The Atlantic Baron [1979] and DSND Subsea [2000], be used to show that the test for ED requires 'immediate action to avoid the contract'? |
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Definition
| In both of these cases, the Victim did not take immediate action to avoid the contract, and therefore the courts held that there was no ED |
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Term
| DSND Subsea [2000] - on protest vs affirm |
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Definition
Case concerning poor insurance provisions for divers
The 'victims' of the ED did not protest for quite a while - instead they continued with the altered agreement.
Therefore = no ED. |
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Term
| Daniel Tan - on causation for ED |
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Definition
| If the courts make out illegitimate pressure for illegitimate purpose, with lack of practical choice... then the but-for test is made out (as clearly the ED would be the significant cause) |
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Term
| THE DOCTRINE OF CONSIDERATION WAS WEAKENED BY THE DECISION IN WILLIAMS V ROFFEY BROTHERS AND ENABLE REASONABLE RE-NEGOTIATIOS TO BE ENFORCED. THE DOCTRINE OF ECONOMIC DURESS FORCES US TO DECIDE WHICH WILL BE ENFORCED. |
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Definition
| THE DOCTRINE OF CONSIDERATION WAS WEAKENED BY THE DECISION IN WILLIAMS V ROFFEY BROTHERS AND ENABLE REASONABLE RE-NEGOTIATIOS TO BE ENFORCED. THE DOCTRINE OF ECONOMIC DURESS FORCES US TO DECIDE WHICH WILL BE ENFORCED. |
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