term1 Definition1term2 Definition2term3 Definition3
Please sign in to your Google account to access your documents:
DURESS
essential characteristic of contract law that parties enter into an agreement voluntarily; a party who has been coerced into a contract may be able to avoid the obligations of the contract by reliance upon duress
Barton v Armstrong [1976] [duress and threats of violence; duress to the person]
Pao On v Lau Yiu Long [1980] [requirements of economic duress]
Universal Tankships v International Transport Workers Federation (1983) [availability of practical alternative, economic duress]
ILLEGITIMATE PRESSURE / THREATS
2 general rules, with exceptions:
THREATS
threat to do that which defendant has a right to do is not normally illegitimate; however threat to do something that you have the right to do can sometimes be unlawful...blackmail (where threat of lawful action is unlawful)
CAUSATION
Pressure must have caused complainant to enter into the contract - causation test differs according to the type of duress (duress to the person, economic duress).
B & S Contracts v Victor Green Publications Ltd [1984] [threats of unlawful action , illegitimate pressure]
CTN Cash and Carry Ltd v Gallagher [1994] [threats of lawful action]
Huyton SA v Peter Cremer GMBH & Co [1999] [requirements for economic duress]
threatening not to pay for consignment of wheat unless Cremer (seller) agreed to submit to arbitration - Court held entitled to not pay in this case
significant cause - decisive & clinching *no feasible alternatives from perspective of the defendant *good faith could be considered but not decisive ---important dictum-- standard for economic duress should be a significant cause and in circumstances such that there were not feasible alternatives from the perspective of the defendant
first, ‘illegitimate pressure by one party’, and secondly the requirement that this should be ‘a significant cause inducing the other party to act as he did’.
Tam Tak Chuen v Khairul Rahman [2009]
Saw the use of the four factors test…a threat of lawful action was decided as illegitimate and constituted duress…first case for this…claimant and defendant were medical practitioners/doctors…running practice as a number of companies they owned together…persistent rumours that Tam Tak Chuen, married, was having an affair with an employee of the company…so his partner asked several times about the affair and he denied everything…partner behind his back installed CCTV cameras in the medical practice…cameras picked up Tam Tak Chuen having sexual relations with the employee in question in one of the consulting rooms…printed still photos and spent three months thinking what to do…decided this was opportunity for him to obtain Tam Tak’s shares at a cheap rate…consulted lawyers and asked them to draw up purchase agreement for shares and then confronted Tam Tak with video evidence, threatening to go to court for wind up proceedings to close up the practice and the video would have to be public then…Tam Tak forced to sell his shares at price dictated by partner of only 25%of real value…Tam Tak agreed and signed all documents and resigned from the company…Tam Tak went home to his wife…the other partner’s wife had come into possession of video and showed it to Tam Tak’s wife…so when Tam Tak returned home his wife was waiting for him…now that his secret was out he might as well report the matter to the police…police seized all video evidence from partner…whether partner had committed possible criminal offence of blackmail…police decided no criminal offence had been committed…nevertheless Tam Tak decided he wanted his shares back and brought proceedings claiming he had signed transfer agreement under duress…defendant’s argument was that there was no duress in this case as it was threat of lawful action…judge held that nevertheless that threat of lawful of action could be illegitimate and constitute duress…court used four factor test and found agreement signed under duress…was held there was abuse of legal process because partner legal proceedings for his own selfish interest…was not acting in good faith because he knew he was getting the shares at a price well below market value…was an unreasonable demand because was asking too much to ask Tam Tak to sell shares, leave practice, and resign from company…was unconscionable in light of all the circumstances of the case because conduct of defendant was calculated to abuse circumstances presented by his discovery…
MORE DURESS CASES from lecture
Need help typing ? See our FAQ (opens in new window)
Please sign in to create this set. We'll bring you back here when you are done.
Discard Changes Sign in
Please sign in to add to folders.
Sign in
Don't have an account? Sign Up »
You have created 2 folders. Please upgrade to Cram Premium to create hundreds of folders!