Duress

Question 1

What is the outcome if it is found a party was acting under duress?

Answer 1

They will be released from contractual obligations

Question 2

What circumstances give rise to duress?

Answer 2

Actual/threats of violence to kill a person
Threats to property
Economic duress

Question 3

What case is related to actual/threats of violence?

Answer 3

Barton v Armstrong

Question 4

Facts of Barton v Armstrong

Answer 4

D threatened to kill C if he did not purchase shares from him
C did but later sought a declaration that the transaction was hour for duress

Question 5

Outcome of Barton v Armstrong

Answer 5

Evidence showed he was influenced by the threats however it was also a good business move for him
The courts held this was not necessary. It was voidable because of threats

Question 6

What is economic duress?

Answer 6

Threats directed at ones financial well being

Question 7

What case is related to economic duress?

Answer 7

Pao On v Lau Yiu Long

Question 8

Facts of Pao On v Lau Yiu Long

Answer 8

D threatened not to proceed with the sale of shares unless C agree D to renegotiation on other issues
C wanted to avoid litigation so reached an agreement
C tried to enforce agreement but D resisted based on duress

Question 9

Outcome of Pao On v Lau Yiu Long

Answer 9

It did not amount to duress. Stated duress require ‘coercion of the will which vitiates consent’
Lord Scarman identified factors to help establish duress:
Did they protect at the time
Was there an alternative course of action
Did he try to avoid the contract after it was formed