WEEK 10
DURESS, UNDUE INFLUENCE AND
UNCONSCIONABILITY
Readings
* McKendrick, pp 322-339
Consumer Protection from Unfair Trading Regulations 2008, regs 7, 27A-L (inserted
by Consumer Protection (Amendment) Regulations 2014)
Duress
o Barton v Armstrong [1976] AC 104 (PC)
o North Ocean Shipping Co v Hyundai Construction Co, The Atlantic Baron
[1979] QB 705 (QBD)
o * R v Attorney General [2003] UKPC 22, [2003] EMLR 24
Undue influence
o Allcard v Skinner (1887) LR 36 Ch D 145 (CA)
o Credit Lyonnais Bank Nederland NV v Burch [1997] 1 All ER 144 (CA)
o * Royal Bank of Scotland Plc v Etridge (No 2) [2001] UKHL 44, [2002] 2 AC
773
Unconscionability
o Lloyds Bank Ltd v Bundy [1975] QB 326 (CA)
o National Westminster Bank Plc v Morgan [1985] AC 696 (HL) at 707-8
o Cresswell v Potter [1968] 1 WLR 906 (Ch D)
Optional further reading: Smith, ‘Contracting Under Pressure: A Theory of Duress’
[1997] CLJ 343-73
Questions
1. Duress, undue influence and unconscionability—like
misrepresentation—ordinarily make a contract voidable. What does this
mean? What does a contracting party need to do to avoid a voidable
contract? What limits are there on the power to avoid a voidable
contract?
When a person is forced to do something against his or her will, that
person is said to have been the victim of duress—compulsion. There are
two types of duress: physical duress and duress by improper threat. A
contract induced by physical violence is void.
Void at the discretion of the claimant.
You have to rescind within reasonable time (this Is unclear but there Is
some guidance by Lord Denning, I.e. that when you arent pressured
anymore, can you, as a reasonable human being, rescind the contract
now?)
Restitution will be Impossible when the Item attempted to be restored Is
not the same as It was at the start.
, 2. Why do illegitimate threats or coercion allow a contracting party to
escape his contract? Why does our answer to this question matter?
Freedom of contract Is Infringed so courts should step In If this Is
the case.
We always have a choice In entering contracts but If we had to
force ourselves to enter Into one because of another party, then
NO AGREEMENT IS EVEN IN PLACE. A contract was never even In
place In such a circumstance. But even so, In reality you DO sign
the contract. It’s a choice of two evils but no matter what, you sign
up to the contract.
3. What is economic duress? In what circumstances will economic
duress allow a claimant to get out of a contract?
Unlawful use of economic pressure and/or threats intended to overcome
the free will of a person, in order to force him or her to an involuntary
agreement or to do something that he or she would not otherwise do.
1. Pressure, leading to the compulsion of the will of the victim
2. This pressure was illegitimate.
'But-for' causation; burden on the claimant.
CTN Cash Carry
4. In June 2012, Adam’s Apples, a company which supplies fruit to
supermarkets, contracted with Larry’s Lorries to deliver Adam’s
September harvest of apples to supermarkets in London for £200,000, to
be paid in advance. In August, Larry told Adam that because of a fuel
price hike, he would not carry out the contract unless he was paid
£250,000 for the job, but that he would accept payment after delivery.
Adam argued with Larry, but finally agreed, saying that ‘he had no
alternative, but would accept the new price under protest’.
The apples were delivered in September, but owing to Larry’s inefficient
accountant, no invoice was sent out until June 2013, when Adam and
Larry were negotiating a price for deliveries of the next harvest. On
receipt of the invoice Adam sent Larry a cheque for £200,000, telling
Larry he was not prepared to pay the extra £50,000. In response, Larry
told Adam that he would only deliver the next crop if he was paid
£500,000. He was aware that Adam would not be able to find any other
fruit, since there was an unusually high demand for deliveries and all
the other firms were fully booked for the 2013 season.
Discuss.
5. What is the difference between ‘actual’ and ‘presumed’ undue
influence?
"In the broadest possible way, the difference between the two classes is
that in the case of actual undue influence something has to be done to
twist the mind of a donor whereas in cases of presumed undue influence
DURESS, UNDUE INFLUENCE AND
UNCONSCIONABILITY
Readings
* McKendrick, pp 322-339
Consumer Protection from Unfair Trading Regulations 2008, regs 7, 27A-L (inserted
by Consumer Protection (Amendment) Regulations 2014)
Duress
o Barton v Armstrong [1976] AC 104 (PC)
o North Ocean Shipping Co v Hyundai Construction Co, The Atlantic Baron
[1979] QB 705 (QBD)
o * R v Attorney General [2003] UKPC 22, [2003] EMLR 24
Undue influence
o Allcard v Skinner (1887) LR 36 Ch D 145 (CA)
o Credit Lyonnais Bank Nederland NV v Burch [1997] 1 All ER 144 (CA)
o * Royal Bank of Scotland Plc v Etridge (No 2) [2001] UKHL 44, [2002] 2 AC
773
Unconscionability
o Lloyds Bank Ltd v Bundy [1975] QB 326 (CA)
o National Westminster Bank Plc v Morgan [1985] AC 696 (HL) at 707-8
o Cresswell v Potter [1968] 1 WLR 906 (Ch D)
Optional further reading: Smith, ‘Contracting Under Pressure: A Theory of Duress’
[1997] CLJ 343-73
Questions
1. Duress, undue influence and unconscionability—like
misrepresentation—ordinarily make a contract voidable. What does this
mean? What does a contracting party need to do to avoid a voidable
contract? What limits are there on the power to avoid a voidable
contract?
When a person is forced to do something against his or her will, that
person is said to have been the victim of duress—compulsion. There are
two types of duress: physical duress and duress by improper threat. A
contract induced by physical violence is void.
Void at the discretion of the claimant.
You have to rescind within reasonable time (this Is unclear but there Is
some guidance by Lord Denning, I.e. that when you arent pressured
anymore, can you, as a reasonable human being, rescind the contract
now?)
Restitution will be Impossible when the Item attempted to be restored Is
not the same as It was at the start.
, 2. Why do illegitimate threats or coercion allow a contracting party to
escape his contract? Why does our answer to this question matter?
Freedom of contract Is Infringed so courts should step In If this Is
the case.
We always have a choice In entering contracts but If we had to
force ourselves to enter Into one because of another party, then
NO AGREEMENT IS EVEN IN PLACE. A contract was never even In
place In such a circumstance. But even so, In reality you DO sign
the contract. It’s a choice of two evils but no matter what, you sign
up to the contract.
3. What is economic duress? In what circumstances will economic
duress allow a claimant to get out of a contract?
Unlawful use of economic pressure and/or threats intended to overcome
the free will of a person, in order to force him or her to an involuntary
agreement or to do something that he or she would not otherwise do.
1. Pressure, leading to the compulsion of the will of the victim
2. This pressure was illegitimate.
'But-for' causation; burden on the claimant.
CTN Cash Carry
4. In June 2012, Adam’s Apples, a company which supplies fruit to
supermarkets, contracted with Larry’s Lorries to deliver Adam’s
September harvest of apples to supermarkets in London for £200,000, to
be paid in advance. In August, Larry told Adam that because of a fuel
price hike, he would not carry out the contract unless he was paid
£250,000 for the job, but that he would accept payment after delivery.
Adam argued with Larry, but finally agreed, saying that ‘he had no
alternative, but would accept the new price under protest’.
The apples were delivered in September, but owing to Larry’s inefficient
accountant, no invoice was sent out until June 2013, when Adam and
Larry were negotiating a price for deliveries of the next harvest. On
receipt of the invoice Adam sent Larry a cheque for £200,000, telling
Larry he was not prepared to pay the extra £50,000. In response, Larry
told Adam that he would only deliver the next crop if he was paid
£500,000. He was aware that Adam would not be able to find any other
fruit, since there was an unusually high demand for deliveries and all
the other firms were fully booked for the 2013 season.
Discuss.
5. What is the difference between ‘actual’ and ‘presumed’ undue
influence?
"In the broadest possible way, the difference between the two classes is
that in the case of actual undue influence something has to be done to
twist the mind of a donor whereas in cases of presumed undue influence
