{"id":413,"date":"2019-04-17T11:14:57","date_gmt":"2019-04-17T11:14:57","guid":{"rendered":""},"modified":"2019-06-11T08:08:32","modified_gmt":"2019-06-11T08:08:32","slug":"lawful-acts-duress-8363","status":"publish","type":"post","link":"https:\/\/www.lawteacher.net\/free-law-essays\/common-law\/lawful-acts-duress-8363.php","title":{"rendered":"Should Lawful Acts Constitute Illegitimate Pressure in the Doctrine of Duress?"},"content":{"rendered":"

‘Lawful acts should never
\nconstitute illegitimate pressure for the purpose of the doctrine of duress’
\nDiscuss.<\/h4>\n

Duress is a common-law concept<\/a> in which illegitimate pressure vitiates the consent of a party to a contract. Illegitimate pressure consists of one main practice being coercion which is going against a person\u2019s rights and which will make the contract voidable as the use of force is used[1]<\/a>. An example is the act of threatening; this makes the contract involuntary as there is seen to be \u2018no real choice\u2019 in the matter at hand. The scope of duress<\/a> at common law was very narrow and confined to unlawful physical violence to the person or constraint of the other party by being threatened. Particularly the early cases, as they refused to recognise \u201cduress of goods\u201d as invalidating a contract. Whereas, modern cases indicate a more flexible approach: \u201cthe Siboen and the Sibotre 1976, it was said that a person coerced into a contract by the threat of having his house burnt down or a picture slashed could plead duress\u201d[2]<\/a>.<\/p>\n

ECONOMIC DURESS<\/h3>\n

Based on Pao On and other cases, the courts have developed a
\ndoctrine of \u2018economic duress.\u2019 Economic duress must amount to a ‘coercion of
\nwill, which vitiates consent[3]<\/a>.
\nIt must be demonstrated that the payment made or the contract entered into was
\nnot a voluntary act.’ (Lord Scarman)[4]<\/a>. A
\ncase concerning economic duress is Atlas Express Ltd 1989, whereby the
\ndefendants were contracted to supply basketware to branches of Woolworths and
\nentered into a contract with the claimants to deliver the baskets at an agreed
\nprice[5]<\/a>.
\nHowever, the claimants set the price too low, furthermore, they refused to
\ndeliver the goods unless the defendants paid a higher price. Fearing that they
\nwould be incapable of finding another carrier, coupled with the damaging effect
\nof breaching a contract, the defendants under protest paid the extra sum. The
\nfundamental concept of lawful acts suggests a legal act performed in accordance
\nwith the forms and usages of the law or in a technical manner. Nevertheless,
\nthrough the defendants fearing that they would be unable to find another
\ncarrier, it then forced them to pay the extra sum. This led to the agreement
\nvitiated by duress as the defendants had no real alternative for they had felt
\nthat they were \u2018over a barrel.\u2019 The threat to break the contract was explicit
\nand direct in this case.<\/p>\n

In order to maintain a claim of economic duress, Dyson J set
\nout factors: \u201cthe ingredients of actionable duress are that there must be
\npressure, also whose practical effect is that there is compulsion on, or a lack
\nof practical choice for the victim. Which is then illegitimate and which is a
\nsignificant cause inducing the claimant to enter into the contract.\u201d[6]<\/a>. In defining whether there has been
\nillegitimate pressure, the court takes into reason a range of factors:
\nincluding, whether there has been illegitimate pressure, a definite breach of
\ncontract; if the person who is pressurizing has acted in good faith; if the
\nvictim had any other course but to yield to the pressure; and whether he wanted
\nto rely on the contract. <\/p>\n

UNFAIRNESS <\/h3>\n

One can avoid a contract if they were seen to be forced into
\nit. Illustrations of unlawful pressure include blackmail or threating one\u2019s
\nlife, which causes the person to agree through coercing their will and making
\nthem do something involuntary[7]<\/a>.
\nThe law regards such coercion unjust.  An
\nexample of unfairness duress would be the case of Billiouris v. Biliourious which
\ndoes not appear to be a traditional legal doctrine, as one of the parties named
\nTimothy  stated to the defendant Mary,
\nthat he would marry her only if she signed a prenuptial agreement.[8]<\/a> Mary
\nhad been crying and told Timothy and his lawyer that she did not want to sign, she
\nstated she was doing so against the counsel of her attorney who was not present
\nat the time. After nine years of marriage, Timothy filed for a divorce and Mary
\nfiled an answer and counterclaim seeking a divorce of the alternative grounds of
\ncruel and abusive treatment or irretrievable breakdown of the marriage. This
\nled to Timothy enforcing the agreement of the prenuptial agreement and Mary argued
\nthat the agreement should not be enforced because she had signed it under
\nduress. The court of appeals rejected Mary\u2019s claim of duress and affirmed the
\ntrail courts conclusion that the prenuptial agreement was fair at the time of
\nits execution and was thus enforceable. Timothy retained in conclusion assets
\nworth over eighteen times more than Mary\u2019s assets. Further showing that the
\nlawful act of a prenuptial agreement can be constituted as illegitimate
\npressure because although it was a lawful agreement, Mary was pressured into
\nsigning the agreement.<\/p>\n

TYPES OF UNFAIRNESS <\/h3>\n

Contract law typically steers clear of investigating into
\nthe fairness of contracts, procedural fairness looks at the process of reaching
\nagreement compared to substantive fairness which looks at whether the bargain
\nitself is reasonable. \u201cSubstantive fairness was first introduced by the unfair
\ncontract terms 1977\u201d[9]<\/a>.
\nA doctrine which is
\ndeveloped in English contract law is duress and it is related to procedural
\nunfairness of contracts. A party who has entered into a contract by coercion,
\ncan rely upon duress to come to the conclusion that the contract is voidable. There
\nare three categories of duress; the first one is duress to a person which
\ncomprises of violence to the claimant of his family and it is cited in Barton
\nv. Armstrong. Armstrong was the
\nchairman and had the largest sharing holding in Landmark Corporation Ltd, a
\npublic company[10]<\/a>. Barton was the managing
\ndirector and moreover had a considerable shareholding. There were two other
\ndirectors named Bovil and Cottrel. There had been a lengthy history of hostility
\namongst the parties and a struggle over who should have the most power with
\nArmstrong being the most forceful. The contract could be set aside. Where
\nthere is duress to the person there was no obligation to show that he would not
\nhave entered the agreement but for the threat, it being adequate that the death
\nthreats were a cause.[11]<\/a> Secondly,
\nit is the duress to goods in which the threat consists of the claimant\u2019s goods
\ncited in The Siboen and The Sibotre. Thirdly, is the economic duress which is
\nthe most divisive one. \u2018Until recent times economic and commercial duress
\nis ignored by the common law due to major conflicts of political power.\u2019[12]<\/a> This
\nhappens when the one contracting party uses his economic power with an
\n\u2018illegitimate\u2019 way to coerce the other party to agree to the terms of the
\ncontract and it is cited in R v. Attorney-General for England and Wales.[13]<\/a><\/p>\n

Both duress and
\nundue influence are factors that may affect mutual assent considering that one
\nof the parties has been pressured or coerced to sign. It
\nis argued that it is difficult to draw the line between coercion and consent as
\nhow can we distinguish genuinely free, autonomous agreements from unfree forced
\nones. An example is torture, if someone gives in under torture and gives up
\ninformation or confesses, we
\ndo not see this as a free or voluntary act: we say they were coerced. This is
\nnot because they did not choose<\/em>, but because they chose in a context
\nthat undermined their autonomy. This is evident through an example of a father
\nwho is eighty-three and suffered a stroke. His power of attorney was given to
\nhis son Michael[14]<\/a>. Which implies that his
\nson can make decisions for his father such as whether his father\u2019s roof needed
\nto be repaired and whether his father should sell certain properties he owns
\nand other financial matters. This leads to Michael asking his father to invest
\n$10,000 from his savings into Michael\u2019s new tattoo shop. Paul did not want to
\ninvest as his son had been unsuccessful at several other businesses.  Michael then tells his dad he will no longer
\ntake care of things for him, if he does not care enough to invest in his
\nbusiness. Paul does not have relatives close enough to aid him with these
\nissues and so he transfers money from his savings account to Michael. The contract
\nMichael offers to him labels the transaction as an \u2018investment\u2019 instead of a \u2018loan\u2019. When the business fails after a brief time, Paul attempts to hold his son
\naccountable for repaying the money by filing a civil suit. Michael presents the contract to the
\ncourt, asserting the money was an investment in a unsuccessful business rather
\nthan a loan. In this case Michael is portraying himself as trustworthy- having counselled
\nhis father on various monetary matters, and managing his dealings. Coercing his
\nfather by intimidating him to stop doing these things is unwarranted and left Paul
\nfeeling that he had to give his son all his savings. The court would view this
\ncase as undue influence and give Paul the option of voiding the contract, in
\nwhich Michael would then have to repay the money.<\/p>\n

ESSENCE OF DURESS <\/h2>\n

ILLEGITIMATE OF PRESSURE <\/h3>\n

The legitimacy of the pressure must be examined from two qualities:
\nprimarily, the nature of the pressure and secondly, the nature of the request
\nwhich the pressure is applied to support: the danger of any form of unlawful act
\nwill be deemed as illegitimate. On the other hand, the threat being lawful does
\nnot necessarily make the pressure legitimate. 
\nAs Lord Atkin <\/a>said:
\n\u201cThe ordinary blackmailer normally threatens to do what he has a perfect right
\nto do – namely, communicate some compromising conduct to a person whose
\nknowledge is likely to affect the person threatened … What he has to justify
\nis not the threat, but the demand of money.”[15]<\/a>
\n This is evident in the case of Dimskal Shipping v
\nITWF (The Evia Luck) [1991][16]<\/a>. The
\nplaintiff ship-owners had been persuaded by industrial action against a container
\nin Sweden. These actions would be lawful under Swedish law. To assume to enter
\ninto written contracts with the ITF under which more substantial agreements
\nwere to be entered into for imbursement of the crew; back dated and back pay
\nwas to be paid under these. One of the documents signed implied that the task
\nwas to be administered by English law. The plaintiffs professed to evade the
\nagreements for duress and to retrieve the dues that they had paid under them.
\nThe contract has to be avoided before a claim for restitution could be
\nmaintained.  In order to validate
\navoidance of a contract, the economic pressure must be considered illegitimate.
\nLord Diplock suggested
\n\u2018his apparent consent was inducted by pressure exercised upon him by that other
\nparty which the law does not regard as legitimate\u2019[17]<\/a><\/p>\n

UNLAWFUL THREATS<\/h3>\n

Lawful threats may also be treated as illegitimate, In
\nHuyton SA, Mance Jsaid that the question of good or bad faith \u201cmay be
\nparticularly relevant when considering whether a case might represent a rare example of
\n\u2018lawful act of duress\u201d[18]<\/a> This
\nis apparent though the case of CTN contracted with Gallagher[19]<\/a> for
\nthe consumption of cigarettes. Gallagher sent the cigarettes to the wrong
\naddress where they were stolen before he could correct the error. The concern
\nwas that Gallagher insisted that CTN to pay for the cigarettes despite those
\nnot being delivered due to Gallagher\u2019s own mistake. Gallagher argued that the
\nrisk had passed to CTN already when the goods were delivered to the incorrect
\nwarehouse. Gallagher threatened to discontinue CTN\u2019s credit facilities for
\nfuture dealings if CTN failed to pay. To prevent the loss of its credit
\nfacilities CTN paid. However, CTN sued for repayment on grounds of economic
\nduress \u2013 in other words, CTN argued that the contract was voidable owing to
\nduress and inequality of bargaining power. The court found against CTN. There
\nis no doctrine of inequality of negotiating power in the commercial context
\nunder common law which means that cases need to be decided on their individual
\nfacts.
\nThe Court based its
\ndecision on three factors here. First, the agreement\/dealings in question took
\nplace between two commercial bodies, two companies, and not between a supplier
\nand a consumer. Second, Gallagher had the right to refrain from future dealings
\nwith CTN for any reason it chose. Thus, because a decision to discontinue
\ndealings with CTN was lawful, it was also lawful for Gallagher to threaten CTN
\nwith credit withdrawal in the absence of payment of an invoice that was already
\ndue. Thirdly, and most important, Gallagher acted in good faith when it
\ndemanded payment from CTN \u2013 it genuinely felt entitled to the payment. In the
\nabsence of malice or any other form of bad faith, economic duress could not be
\nestablished.<\/p>\n

DSND (2000) construction company suspended work on oil rig
\nuntil renegotiation of price agreed, which they then sought to enforce. PGS Offshore
\nTechnology AS signed an agreement with DSND Subsea Limited to deliver subsea
\nwork required to connect the vessel to an underwater wellhead[20]<\/a>.
\nThe agreement was formalized in various of documents. The first of these was
\nthe heads of agreement. There was no dispute about the terms of this contract. Successively,
\nthe participants entered into a further document, the memorandum of
\nunderstanding. PGS later asserted that this agreement was entered into as a
\nresult of economic duress. DSND had refused to continue work on the vessel until
\nPGS had agreed to provide assurances as to its insurance cover and security, and
\na refundable source of payment. PGS was under extreme economic pressure from
\nits owner and was at risk of significant damages for deferral. PGS consequently
\nagreed to these terms. It stated later that it had done so under duress. No
\nduress was uncovered, the judge reviewed the law of economic
\nduress in the following test:[21]<\/a>
\nThere must be a threat or pressure;
\nThe practical result of the threat must be that there is force on, or an
\nabsence of choice for, the victim; it must be unlawful; and there must be
\na significant cause prompting the claimant to enter into the contract. This
\nupholds the extensive contextual approach conveyed in Huyton.<\/p>\n

In the final analysis, lawful acts should never constitute
\nillegitimate pressure for the purpose of duress. All the cases listed above are
\nreal life examples of people being coerced into taking an action they did not
\ngenuinely agree to. Therefore, if someone takes an action because they were
\nthreatened or coerced, that action be it lawful should be regarded as
\nillegitimate.<\/p>\n

References<\/h2>\n