Vitiating Factors: Economic Duress Flashcards
What is economic duress?
When someone enters a contract due to financial threats
How do the courts deal with economic duress cases?
On an individual basis
What happens if economic duress is established?
It makes the contract voidable so will continue until innocent party avoids it
What happened in Skeate v Beale?
Threats to property were not deemed to be duress
What happened in The Siboen and The Sibotre?
Serious threats should be considered duress
What happened in Atlas Express v Kafco?
Atals said there was a min no. of deliveries that Kafco had to give them
Kafco agreed because they needed deliveries to be done
Was economic duress, no consideration provided by Atlas for additional term, just performing their existing duty
What does there need to be for economic duress to succeed?
Compulsion of will/lack of practical choice for victim
Pressure must be illegitimate
Illegitimate pressure is a significant cause of making contract
What is compulsion of will/lack of choice?
Needs to be evidence that there was no choice but to agree
What happened in Universe Tankships v International Transport Workers?
ITW blocked ship, made demands about pay and working conditions, large sum of money to release ship
Was economic duress, money had to be repaid
What is pressure must be illegitimate?
Against rules of contract
What does Pao On v Lau Yiu Long set out?
Factors for pressure being illegitimate
What happened in CTN Cash & Carry v Gallagher?
Claim failed as it was lawful for D to remove the credit agreement at any time as this was stated in the contract
What is significant cause for making the contract?
Pao On v Lau Yiu Long:
- Did person claiming ED protest
- Was there another reasonable course of action available to take
- Was he independently advised before taking action
- After entering contract, did they take steps to avoid ‘thing’ in qs
What happened in Progress Bulk Carriers v Tube City?
Hirers only agreed not to sue as they had no alternative as cargo was decreasing in value
ED may be lost due to lapse of time (The Atlantic Baron)
What are remedies for ED?
Restitution of property - courts orders property or money gained through ED to be returned to innocent party
Contract which contained ED will also be voidable
