Duress and Undue Influence Flashcards
(27 cards)
Duress to the person: Barton v Armstrong
Duress to the person renders a contract void, even if other factors influenced it.
💡 Threats of violence contributed to the signing of a contract.
Duress to goods: Skeate v Beale
Early view: duress to goods doesn’t affect validity of contract.
💡 Threat of seizing goods used to enforce a promise.
🟥 Outdated – not consistent with modern doctrine
Economic Duress: DSND Subsea v Petroleum Geo-Services
Duress requires:
- illegitimate pressure
- leaving no practical alternative and
- causing contract entry.
💡 Contract renegotiation upheld—no bad faith.
Duress to Goods: Siboen and Sibotre
“The true question is ultimately whether or not the agreement in question is to be regarded as having been concluded voluntarily.”
Economic Duress: Pao On v Lau Yiu Long [1980]
Criteria:
- Did the person claiming to be coerced protest?
- Did they have any other available course of action?
- Were they independently advised?
- Did they take steps to avoid the contract after entering into it?
💡 Shareholders were pressured into indemnity agreement.
Economic Duress: Atlas Express v Kafco [1989]
Contract voidable due to pressure with no real alternative.
💡 Small firm had no option but to accept increased charges.
Lawful Act Duress: CTN Cash & Carry v Gallaher [1994]
Lawful conduct done in good faith unlikely to be duress.
💡 Threat to withdraw credit facility upheld.
Lawful Act Duress: Times Travel v PIA [2021] UKSC
Lawful act duress exists, but applies only in rare, extreme cases.
💡 Airline used leverage to renegotiate contract with travel agent.
Duress & Sovereign States: Law Debenture Trust v Ukraine [2023] UKSC
Economic and political pressure on sovereign states may vitiate consent.
💡 Ukraine claimed coercion by Russia during bond issuance.
Distinguishing Duress from Pressure: Alec Lobb v Total Oil [1983]
Inequality and hard bargaining alone do not constitute duress.
💡 Long-term lease upheld despite commercial disadvantage.
Effect of Duress: Halpern v Halpern [2007]
Duress renders contract voidable, not void.
💡 Case involved family trust restructuring.
Effect of Duress: North Ocean Shipping v Hyundai [1979]
Contract affirmed by lack of timely objection.
💡 Payment made under protest but no later challenge.
Effect of Duress: Barton v Armstrong [1976] AC 104
Duress to the person renders a contract void, even if it wasn’t the sole cause of entry.
💡 Armstrong threatened Barton with death unless he signed a deed; the Privy Council held the agreement was void.
Effect of Duress: Morley v RBS [2021] EWCA Civ 338
Failure to act promptly may affirm a contract; courts distinguish between hard bargaining and illegitimate pressure.
💡 Morley was a sophisticated investor and did not take immediate steps to challenge terms after pressure.
Economic Duress: R v A-G for England and Wales [2003] UKPC 22
Lawful pressure can be illegitimate in context—must consider fairness.
💡 Soldier coerced to sign confidentiality agreement.
Duress v Commercial Pressure: Times Travel v PIA
Illegitimacy, not hardship, determines duress
Duress vs Undue Influence: RBS v Etridge (No.2)
Duress requires illegitimacy in law; UI arises in relationships of trust
Forms of UI: Presumed: RBS v Etridge (No.2)
Where a relationship of trust and confidence exists between parties, banks must presume UI
💡 Banks must ensure independent advice to avoid being tainted by UI claims.
Forms of UI: Barclays Bank plc v O’Brien [1993]
Where a party (e.g., a spouse) is induced by UI to sign, and the bank is on inquiry, it must ensure independent advice is given.
💡 Wife misled into signing surety; bank failed in its duty.
Actual Undue Influence: CIBC Mortgages plc v Pitt [1993]
Actual UI involves overt exploitation or pressure; no need for manifest disadvantage.
💡 Wife misled into signing mortgage; bank not liable due to lack of notice.
Presumed UI: RBS v Etridge (No 2)
Presumption arises from certain relationships (e.g., solicitor-client); must be rebutted by showing informed consent.
💡 Etridge confirms formal steps for securing consent.
Presumed UI (de facto): Lloyds Bank v Bundy [1975]
Elderly man relied on bank’s advice when mortgaging home for son; no independent advice = presumed UI.
💡 Denning suggested a broader “inequality of bargaining power” doctrine.
Presumed UI (de facto): RBS v Etridge (No 2)
Presumed influence can arise from trust and confidence in non-legal relationships; flexible category.
💡 Lord Nicholls: no single touchstone applies.
Presumed UI (spouses): Barclays Bank plc v O’Brien
Where a spouse acts as surety in a transaction not obviously to their benefit, bank must be on alert.
💡 Constructive notice doctrine engaged.
