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Duress

Irish Contract

QuestionAnswer
Duress: In order for there to be a valid contract the parties must act freely. If one of the parties is forced to make the contract as a result of pressure[by violence or the threat of violence], that is duress, and renders the contract voidable. They do not properly consent, and so there is no contract.
The rolls of Equity and Common law Equity seeks to protect the consent of the parties through the doctrine of undue influence, while the common law seeks to do so by the more limited doctrine of duress.
When developed initially, the common law doctrine of duress applied only in situations involving: threats to life or of bodily harm.
Since then, however, the doctrine has developed to include other forms of undue pressure, such as threats to goods or illegitimate economic pressure.
Duress to the person: The court held that duress can render a contract void. This case involved threats to the life of a man and his family. Barton v Armstrong [1976] AC 104
Since then, it has been held that duress renders a contract voidable. Clarke: recent years have seen the Irish courts take an expansive view of where contracts can be rendered void ab initio because of duress.
The test for duress is: whether the pressure was of a kind which the law regards as legitimate. Illegitimate pressure amounts to duress.
A voidable contract is a real contract right up until the time when it is unwound. However, there are things that stop the process of unwinding (rescission). The bars to rescission: you can’t affirm it, delay, impossible to unwind. If there is a third party involved, it may be impossible to unwind. E.g. a car is sold and then sold on again.
Previously duress was only recognised in cases of threats to you and your family’s personal health. Subsequently, threats to property have also been recognised.
Economic Duress In recent times, the courts have extended the concept of duress from earlier limits so as to recognise that certain forms of commercial pressure could amount to economic duress.
Which case laid out 4 factors to consider in assessing whether economic duress was present? Pao On v Lau Yiu Long Economic duress will result in a voidable contrac. General rule: Duress, whatever form it takes, is a coercion of will so as to vitiate consent.
Pao On v Lau Yiu Long: The Privy Council identified 4 factors to consider in assessing whether economic duress was present: whether the person alleged to have been coerced did or did not protest; the coerced party had an alternative course open to him (such as an adequate legal remedy); he was independently advised; and after entering the contract he took steps to avoid it.
Economic Duress: The court recognised that economic duress was recognised as a form of duress in the same manner as threats to health and property. The court held that the key was not the category but the effect on the mind of the coerced person. Universe Tankships of Monrovia v International Transport Workers’ Federation (The Universe Sentinel) [1983] 1 AC 366
The Nature of Duress: Lord Scarman commented on the nature of duress and how it affects the victim. What is duress: He said that in a situation of duress the victim intentionally submits to the compulsion of the other person because there is no other option open to them. It’s not that the person doesn’t consent. They just want to avoid the alternative (the threat) and so it is not a real consent.
Lord Scarman stated that there are two elements to duress: 1.It involves pressure amounting to a compulsion of the will of the victim. - absence of choice 2.The pressure is illegitimate.
Scarman J identified four factors which indicate if a person’s will has been overborne: a)Did the person protest? b)Was there an alternative course open to him? c)Was he independently advised? d)After entering the contract did he take steps to avoid i a)Proff- a person may not wish or be able to protest b)Proff- if so it would be taken c)Proff- this is nothing more than a proxy d)Me– surely, the judge wouldn't be considering this if they didn't?
The Test for Duress - Illegitimacy Lord Diplock, in giving the leading judgement for the majority, outlined the test for duress: [the victim’s] apparent consent was induced by pressure exercised on him by that other party which the law does not regard as legitimate, with the consequence that the consent is treated in law as revocable unless approbated either expressly or by implication after the illegitimate pressure has ceased to operate on his mind.
Lord Scarman, the sole dissenting judge, gave a more structured test for duress. Lord Scarman gave two factors to be considered in determining whether pressure is illegitimate: 1. The nature of the pressure. 2. The nature of the demand. In applying the test, the first condition should be considered initially. If the pressure is unlawful in nature, the pressure is illegitimate and duress applies.
If the first condition is lawful, the second condition should be considered subsequently. If the demand is unlawful in nature, the pressure is illegitimate and duress applies. If neither condition is unlawful, the pressure is not illegitimate and duress does not apply.
Lord Diplock’s test remains the test for duress. However, illegitimate pressure is determined using Lord Scarman's 4 tests.
It can be seen that from the cases since Pao On(1980) there has been a considerable relaxation of the criteria needed to prove economic dress. All that is now required is a suppression of the victim's will and voluntary consent. Dimskal Shipping Co v International Transport Workers’ Federation (The Evia Luck) (No 2) [1992] 2 AC 152 (HL) The pressure applied must be improper in the legal sense.
Not all pressure in a commercial context will constitute duress: Williams v Roffey The expansion of the doctrine of duress to include illegitimate economic pressure coincides with the increasing liberalisation of the doctrine of consideration, as seen in the case of, where it was held that a pre-existing contractual duty could amount to good consideration provided no economic duress was exerted.
Today Must be pressure resulting in Lack of practical choice Illegitimate Significant cause Per dyson j dsnd case
But a threat to breach a contract can amount to duress in an appropriate case: B&S v Victor Green Lack of practical choice Ideal home show held at Olympia. Green commissioned to make stands. B&S contracts ask for more money to pay their work force. As gift not advance. Green must accept to have his stand. They invoice him and he pays. Bs sue him.
Created by: bellevoile