Duress Vitiating Factors Duress and Undue Influence are "vitiating factors". They make an otherwise valid contract "voidable" (not void). The "innocent" party can choose whether to continue with the contract or not. Duress Common law concept. Its origin is in the use of physical violence, or threatened violence, to make someone enter into a contract. Barton v Armstrong [1976] AC 104 Victim did not really agree to the contract because his or her "will was overborne". Subsequent Development Attorney General v R [2003] UKPC 22 Duress can be defined as "physical threat or other illegitimate pressure being used for an improper objective which is sufficiently serious to vitiate the consent of the other party" Subsequent Development contd Lord Hoffman- started by referring to the decision of the H of L in Universe Tankships Inc of Monrovia v International Transport Workers' Federation [1983] 1 AC 366. In the above case, Lord Scarman identified two elements to duress (1) pressure amounting to compulsion of the will (2) the illegitimacy of that pressure. Subsequent Development contd As regards the illegitimacy of the pressure, two issues arise (1) the nature of the pressure (2) the nature of the demand which the pressure is applied to support. As regards the nature of the pressure, where the threat is to carry out some unlawful act, the pressure would generally be considered illegitimate. This does not necessarily mean that the threat of a lawful action would automatically be legitimate because the second issue could arise. The second issue looks at the objective of the threat. Subsequent Development contd Economic Duress Threat to break a contract - The Siboen and The Sibotre [1976] 1 Lloyd's Rep 293 North Ocean Shipping Co v Hyundai Construction, The Atlantic Baron [1979] QB 705 Industrial action- Universe Tankships Inc v ITWF, The Universe Sentinel [1983] 1 AC 366 Dimskal Shipping Co SA v ITWF, The Evia Luck [1992] 2 AC 152 Tests for Economic Duress Lord Scarman in Pau On v Lau Yiu Long [1980] AC 614 -
Did the person protest at the time? Was there an alternative course of action? Was the person independently advised? Did the person take steps to avoid the contract after entering it? Tests contd Atlas Express v Kafco (Importers and Distributors) Ltd [1989] QB 833 The court held that Kafco had no real alternative but to comply with Atlas's suggestion. Duress was found to be applicable and Kafco were not obliged to pay the increased charges. Must the threat be of an unlawful act? CTN Cash and Carry v Gallaher [1994] 4 All ER 714 The Court of Appeal stated obiter that the fact that it was a lawful threat was not in itself fatal to a claim for duress. It was, therefore, possible in appropriate circumstances for a threat to commit a lawful act to amount to duress. Possibility was recognised, but not applied. Current Law Restatement Attorney General v R [2003] UKPC 22 Compulsion of victim's will (ie no realistic alternative to compliance);