economic dures

Question 1

Define economic duress?

Answer 1

a legal doctrine where one party uses illegitimate economic pressure to force another party to enter into a contract or modify an existing contract

Question 2

What is economic duress?

Answer 2

• a threat to damage a business or a person financially
• the court will consider each case involving econmic duress according to its individual circumstances

Question 3

What must there be originally?

Answer 3

• a lack of practical choice for the victim
• the pressure might be illegitimate
• the illegitimate pressure is a significant cause of making the contract

Question 4

Atlas Express v Kafco

Answer 4

threatening to breach an existing contract can constitute economic duress, particularly when the victim has no practical alternative

Question 5

For economic duress there must be pressure that:

Answer 5

• takes away the victim choice
• is illegitimate
• is a significant cause for inducing the victim to enter into the contract

Question 6

Universe Tankships Case - House of Lords

Answer 6

The party seeking to claim duress must have protested at the time and must not hesitate to seek to seek legal advice
However, Lord Scarman emphasised that the presence of a protest at the time of payment was strong evidence of coercion

Question 7

What is illegitimate pressure?

Answer 7

• the pressure must go beyond legitimate commercial bargaining
• must involve threats that are unlawful
• examples include threats to breach existing contracts, unlawful actions or exploitation of vulnerability

Question 8

Pao On v Lau

Answer 8

Opportunity to seek advice and consider options weighs against finding duress

Question 9

CTN Cash & Carry v Gallagher
POL

Answer 9

No economic duress found as Gallaher genuinely believed CTN was liable, and the threat to stop supply was commercially acceptable.

Question 10

D&C Builders v Rees

Answer 10

Taking advantage of another’s financial vulnerability can constitute as economic duress

Question 11

Bulk Carriers v Tube City

Answer 11

commercial pressure must be illegitimate not merely difficult or disadvantageous

Question 12

Times Travel v Pakistan International Airlines

Answer 12

“lawful act duress” requires exceptional circumstances beyond hard bargaining

Question 13

What must the pressure be?

Answer 13

a significant cause of the contract or variation

Question 14

Explain no practical alternative

Answer 14

• the victim must have had no reasonable alternative course of action
• no adequate legal remedy was readily available
• time constraints prevented seeking alternative

Question 15

Explain protest or objection

Answer 15

• courts often look for evidence that the victim protested
• objection strengthens the claim
• prompt action to challenge the contract after pressure ends

Question 16

explain no affirmation

Answer 16

• the victim must not have affirmed the contract after the pressure ended
• taking benefits under the contract can constitute affirmation
• delay in challenging the contract may be seen as affirmation