Duress

Duress

1. One party alleges that they only entered a contract due to illegitimate pressure from the other party, resulting in a compulsion of the will

   • Physical Duress
     • Barton v Armstrong
       • C paid D £320,000 to remove D from the board of directors
         • C only paid this money, partly because commercial reasons, and partly because D threatened to murder him if he didn't
           • Held that C only entered the agreement because of the threat, and therefore the contract was void under duress
   • Duress of Goods
     • One party retains the goods of another until payment is made
     • Skeate v Beale
       • Landlord took the belongings of a tenant due to unpaid rent
         • Reached an agreement where the tenant would pay extra to recover his belongings
           • Court held that the agreement couldn't be set aside for duress
     • The Alev
       • C's ship carried a cargo of steel, but the charters defaulted on payment
         • Meanwhile, the charterers passed the steel to D
         • C told D that unless they paid the sum owed by the charterers, they wouldn't receive their cargo
           • Court held that the agreement could be avoided under the duress of goods
   • Economic Duress
     • Illegitimate commercial pressure, usually resulting in catastrophic financial consequences
       • Requirements
         • Protest
         • No alternative
         • Seeked advice
         • Took steps to avoid
     • D&C Builders v Rees
       • P worked for D, D owed P money, but offered only 60% as P was in financial difficulty
         • P accepted, later tried to recover remaining 40%
         • P successfully recovered remaining 40% due to economic duress
     • The Atlantic Baron
       • D was a shipbuilder, agreed to build tanker for C, paid in 5 instalments of US$
         • First instalment was paid, but by then the value of the $ decreased by 10%, so D refused to continue building
           • C were anxious that they would lose a lucrative contract with Shell, so agreed to pay extra
           • Once the ship was delivered, C sued D for return of the 10%
             • Court held that the threat to terminate the contract amounted to economic duress, but rescission wasn't available because they made the final payments w/out protest
     • The Universe Sentinel
       • C's ship was boycotted by the union, D, so in order to get the ship released C paid extra
         • D admitted economic duress's said they were protected by the Trade Union Labour Relations Act 1974
         • Held the act didn't protect the union, as there was a compulsion of the will and illegitimate pressure