Contract 8 Duress Flashcards
Stilk v Myrick
Performing existing contractual duties is no consideration
Hartley v Ponsonby
Paying a lesser amount to settle a debt could be good consideration if D
exceeds his duties in some ways
offer an extra and practical benefit to C
The Glidewell principles in Williams v Roffey Bros and Nicholls (Contractors) Ltd
where D may refuse additional benefit/payment promised relying on Stilk v Myrick, performance of existing duty could be good consideration if all the five criteria are met
There is a contract to do work/supply goods and services in return for payments
D doubts C will complete his obligations
D promises additional payment if C completes the work on time (does not matter who introduces the promise)
as a result of giving the promise, D obtains a pratical benefit/obviates a disbenefit
D did not give the promise as a result of economic duress or fraud on the part of C
Define Duress
VIP
Duress is some sort of violence, illegitimate threat or pressure.
whether the threat or pressure was by complusion that left C no practical choice
whether the threat or pressure significantly induces C to enter the new contract or variation.
The threat must be illegitimate (a threat to breach a contract or commit a tort)
Burden of proof and remedy for duress
Burden is on the party who alleges it.
Remedy is the contract becomes voidable (NO DAMAGES).
Factors to consider to determine if there has been an illegitimate threat or pressure for duress
CRAFT
(C) V has any alternative to circumvent the pressure
(R)if V protested/remonstrated at the variation of the contract or
(A) if V affirmed and sought to rely on the new contract
(Faith) the person allegedly exerting the pressure has acted in good or bad faith
(TCT)whether there was actual or threaten breach of contract
Carillion Constuction Ltd v Felix (UK) Ltd
to establish duress, C must prove
an illegitimate pressure or threat
whether the threat or pressure was by complusion that left C no practical choice
whether the threat or pressure significantly induces C to enter the new contract or variation. it does not need to be the only factor (Barton v Armstrong)
Contrast Atlas Express v Kafco and North Ocean Shipping v Hyundai
Atlas Express v Kafco
D refused to continue delivery of C product unless they pay a flat fee for minimum haulage. C did not pay the extra money. Held the contract was entrred under duress
North Ocean Shipping v Hyundai
C paid extra money to resume construction at shipbuilders’s threat of a vessel which had been hired out in advance. C protested and sued after 8 months after delivery. Held duress existed but new contract was affirmed
In Kafco duress was used as a defence with money outstanding so affirmation is not implied. In North Ocean, additional money has already been paid and suit was raised only after 8 months. the court took it as affirmation by conduct.,
Compare the remedy for a contract without good consideration and one that was obtained under duress
without good consideration: the contract is void. there has never been a contract.
under duress: voidable. the contract is good and binding unless the innocent party opts to rescind it.
Bars to rescission
TADA
unreasonable delay
affirmation, e.g. C paid the money demanded while not under any pressure.
an innocent party has taken an interest in the property before the contract is voided
where it is impossible to return substantially the property or goods (damaged or destroyed or exhausted). But an approximate restoration may be awarded
Explain procedure for rescission and consequence
Innocent party must notify the other party that it wants to rescind. if the other party cannot be found or refuses to return money/property, police or court for an order or rescission.
Once rescinded, both parties are relieved of all future obligations. All money or property must be returned.
Duress of goods
Duress of goods generally means that one party unlawfully keeps goods belonging to another to exert some form of influence over them to enter into a contract.
