Contract Law - Seminar 17 Duress/Undue influence Attorney General v R [2003] UKPC 22 · R (former member of the SAS) appeals against findings that he hadn't been subject to duress or undue influence when signing a contract preventing him for disclosing information relating to the work of the UK special forces, and that the contract had been supported by consideration . R argued inter alia that duress had been applied in that he had been told that if he refused to sign the contract, he would be returned to the regiment from which he had come · The military hierarchy, his regimental pride and his admiration for his commanding officer had created a relationship in which the army or his commanding officer had been able to exercise undue influence over him . Held, the R hadn't been subject to duress - the threat of returning him to his old regiment had been lawful since the Crown had been entitled to transfer a member of the SAS to another unit . MoD had acted legitimately in introducing confidentiality contracts . The nature of the contract wasn't such to give rise to an influence that is had been secured by an unfair exploitation of the relationship relied upon by R North Ocean Shipping Co v Hyundai Construction, The Atlantic Baron [1979] QB 705 . D agreed to build a tanker for C for a fixed price, which was to be paid in 5 instalments, in US dollars . C opened a letter of credit as security repayment of instalments in the event of default . After the first instalment was paid, the US dollar's value went down by 10%, so D claimed a 10% increase in the building price in response . C rejected the claim and paid the following instalments based on the original price · D returned the payments . D also stated that C accept their demand for a 10% price increase of D will terminate the contract . Court found in favour of D . D's increase of the letter of credit served as consideration for NOS's increased payments under the original contracttt . While D's demand for a 10% increase didn't amount to economic pressure and made the original contract voidable, C's payments affirmed the contract . Even if a contract is voidable for duress, there is a limitation on the time for rescission of a contract Pao On v Lau Yiu Long [1980] AC 614 - Economic duress - privy council case . C owned the shares of a private company which owned a building that D wanted to buy · D were majority shareholders in the company · C agreed to sell their share in the private company to D so that D could acquire the building · In return C would get shares in the public company
· Feared a drop-in share value of company would result so made another agreement that C would not sell their shares for a while . C