Topic 2 - Duress and Undue Influence Flashcards
(41 cards)
What is the definition of duress in contract law?
Duress involves one party coercing another party into a contract, meaning consent is not present or not given freely.
What is the legal effect of a contract entered into under duress?
The contract is voidable, meaning the wronged party may take action to have it set aside.
Name the three types of duress.
- Duress to the person
- Duress to property
- Economic duress
What characterizes duress to the person?
It involves actual or threatened violence influencing the decision to enter into a contract.
What is the leading case on duress to the person?
Barton v Armstrong [1976] AC 104.
What must be shown to establish duress to goods?
That the agreement would not have been entered into but for the duress.
What is economic duress?
A doctrine involving pressure that results in a lack of practical choice for the victim, which is illegitimate and a significant cause inducing the claimant to enter into the contract.
What are the ingredients of actionable economic duress?
- Pressure resulting in compulsion or lack of practical choice
- Illegitimacy of the pressure
- Significant cause inducing the claimant to enter into the contract
True or False: A contract under duress is automatically void.
False. It is voidable.
What is rescission in the context of duress?
A remedy that involves returning the parties to the situation each was in prior to the contract being entered into.
What happens to the remedy of rescission if the contract is affirmed?
The remedy may be lost as the affirmation will operate as a bar to rescission.
What constitutes illegitimate pressure in the context of duress?
Factors include actual or threatened breach of contract, bad faith actions, and whether the victim protested at the time.
What does the term ‘voidable’ mean?
A contract which remains in force unless some action is taken to annul it.
Fill in the blank: A contract that is voidable remains in force unless some action is taken to _______.
[annul] it.
What can be a consequence of a party affirming a contract after duress?
It can bar the party from seeking rescission.
What is the relationship between commercial pressure and duress?
The dividing line between legitimate commercial pressure and illegitimate pressure amounting to duress may be quite fine.
What is the expectation of contracting parties regarding risks?
Contracting parties are expected to consider risks such as changes in the cost of material/labour when entering into a contract.
What can Party A do if it does not want to take on the risk of cost changes?
Party A can enter into a shorter contract, include a ‘price escalation’ clause, or choose not to contract at all.
What must a victim demonstrate to show evidence of protest against duress?
The victim must demonstrate evidence of protest at the time the alleged duress was exerted.
What is a key factor for establishing economic duress?
It must be shown that the agreement would not have been entered into but for the duress.
What is the minimum basic test of subjective causation in economic duress?
‘But for’ test: the illegitimate pressure must have actually caused the making of the agreement.
What is the relationship between duress and undue influence?
Undue influence overlaps with duress, but is developed by courts of equity.
What does undue influence aim to prevent?
It aims to ensure that the influence of one person over another is not abused.
What are the two types of undue influence identified in RBS v Etridge?
- Overt acts of improper pressure or coercion
- Relationship of influence/ascendancy where unfair advantage is taken.
