Improper Pressure Flashcards
What is duress?
Where one party enters into a contract as a result of threats, this only has to be a contributing factor not the sole cause
What case shows duress by threats?
Barton v Armstrong
What did the court say was needed for duress to be made out in the case of Pao On v Lau Yiu?
‘A coercion of will which vitiates consent, mere commercial pressure is not enough’
What should be looked at in deciding whether there was a coercion of will?
-Whether they protested
-Whether an alternative course was available
-If independent advise was sought
-If after entering the contract the party tried to avoid it
What is economic duress?
Where one party puts pressure on the other to accept the terms of a contract and the other has no reasonable option but to accept
What are the two opposing tests for economic duress and which cases do these come from?
-Was the pressure exerted legitimate or not? (The Universe Sentinel)
-Was there commercial pressure that vitiated consent? (Pao On v Lau Yiu)
What was held in the case of Atlas Express Ltd v Kafco?
Ordinary commercial pressure is not enough to vitiate consent, however a threat to breach an existing contract can amount to illegitimate pressure and therefore economic duress
What was decided in The Evia Luck case?
Economic pressure will amount to duress where it was illegitimate and a significant cause for the plaintiff to enter into the contract
How does the Evia Luck case move away from the older cases?
Moved away from the idea of vitiated consent, the test in Pao On focused more of the effect on the innocent party whilst here focus is on the conduct of the accused party
What was the most recent case on economic duress and what did it tell us?
Time Travels v Pakistan International Airlines,
said the doctrine was in its infancy. For a claim to succeed there must be illegitimate threat/pressure, which caused them to enter into the agreement and the party has no reasonable alternative but to accept
What is undue influence?
Where one party is able to exercise unfair influence over the other due to a relation of dependence or confidence
What are the two types of undue influence and what case showed this?
-Allcard v Skinner
-Actual undue influence: the gift was the result of influence expressly used
-Presumed undue influence: Where the relations between the donor and donee gives rise to a presumption that the donee had undue influence over the donor
Where does the burden of proof lie with actual undue influence?
Burden is on the party claiming to have been wronged, amount of evidence required varies based on circumstances
What is the leading case for presumed undue influence?
Royal Bank of Scotland v Etridge
What two things must be shown to raise a claim of undue influence?
1) A relationship of trust and confidence (e.g. parent to child, doctor to patient, but NOT partner to partner)
2) A transaction that calls for an explanation
