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    Duress and Undue Influence

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    Natalie
    The document discusses the concepts of duress, undue influence, and economic duress as they relate to contracts. It provides definitions and examples of each: 1) Duress involves threats that compel a person's will and cause them to enter a contract against their consent. Physical duress and duress of goods can void a contract. Economic duress can make a contract voidable if improper pressure was used. 2) Undue influence involves taking unfair advantage of a relationship of trust to exploit the other party's free will. Influence itself is acceptable but becomes undue if it abuses a position of power. 3) Economic duress can make a contract

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    Duress and Undue Influence

    Uploaded by

    Natalie
    27 views2 pages
    The document discusses the concepts of duress, undue influence, and economic duress as they relate to contracts. It provides definitions and examples of each: 1) Duress involves threats that compel a person's will and cause them to enter a contract against their consent. Physical duress and duress of goods can void a contract. Economic duress can make a contract voidable if improper pressure was used. 2) Undue influence involves taking unfair advantage of a relationship of trust to exploit the other party's free will. Influence itself is acceptable but becomes undue if it abuses a position of power. 3) Economic duress can make a contract

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    Contract Law

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    The document discusses the concepts of duress, undue influence, and economic duress as they relate to contracts. It provides definitions and examples of each: 1) Duress involves threats that compel a person's will and cause them to enter a contract against their consent. Physical duress and duress of goods can void a contract. Economic duress can make a contract voidable if improper pressure was used. 2) Undue influence involves taking unfair advantage of a relationship of trust to exploit the other party's free will. Influence itself is acceptable but becomes undue if it abuses a position of power. 3) Economic duress can make a contract

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    27 views2 pages

    Duress and Undue Influence

    Uploaded by

    Natalie
    The document discusses the concepts of duress, undue influence, and economic duress as they relate to contracts. It provides definitions and examples of each: 1) Duress involves threats that compel a person's will and cause them to enter a contract against their consent. Physical duress and duress of goods can void a contract. Economic duress can make a contract voidable if improper pressure was used. 2) Undue influence involves taking unfair advantage of a relationship of trust to exploit the other party's free will. Influence itself is acceptable but becomes undue if it abuses a position of power. 3) Economic duress can make a contract

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 2

    Duress and Undue Influence

    Undue Influence
    Actual influence
    Economic Duress
    Promises are not enforceable if not freely given, duress or undue influence should not be
    present. Contract may be avoided if entered into as a result of unfair influence or resulting
    from a conduct exploiting the relationship between the parties.

    Duress:

     Explicitly shows that there are threats.


     Requires a specific act or communication. Is a factor that will make a contract voidable
    as the terms of the contract are good and valid between the parties but it is the action
    on 1 party that will induce the other party to revoke or cancel the contract.
    In Universal Tankships of Mongrovia v International Transport Workers Federation
    (Universal Sentinel) 1983, Lord Scarman stated that 2 elements must be present in order to
    discuss duress.
    1) Pressure amounting to compulsion of the will of the victim: whether there was true
    consent or whether the person has been allegedly coerced into talking the decision).
    2) Illegitimacy of the pressure. Whether the pressure was exercised through an illegal
    act (blackmail) or the nature if the demand which the pressure is applied to support.
    “Was the objective perceived through the threat?
    Physical Duress: If a contract is obtained through physical violence or the use of physical
    violence, the court will not uphold the contract.
    Duress to goods: When a party is forced to enter into a contract on the basis of threats that
    the goods will be destroyed or that takes the goods with the intention to destroy same:
    Occidental Worldwide Investment Corp v Skibs A/S Avanti (The Siboen and The Sibotre)
    [1976]
    Economic Duress: In a situation in which a contract has been obtained by one party by
    applying some non-physical but economic pressure. In Pao On v Lau Yiu Long (1980), D and
    C entered into an agreement whereby D was to guarantee C against a drop in the price of
    the shares acquired. Economic threats, coercion, pressure. Commercial pressure can be
    used for profit maximization, cash flow issues and may not constitute duress. This is normal
    business.
    Void: Contract is illegal at the very start and unenforceable.
    Voidable: One party is bound by the contract terms but the other party has the right to
    change their mind, for e.g., if there is a mistake in the contract or an important element of
    the contract is missing. Party making the mistake is bound by the terms of the contract. It
    will be valid until 1 party decides to cancel or revoke it based on the mistakes found.

    Undue Influence: Illegitimate or unconscionable (harsh, unfair) as it lacks autonomy of the


    decider

     Implied threats.
     Exploitation of someone.
     No need to have an open act of pressure.
     Will make a contract voidable. It is an equitable doctrine.
     Influence in itself is perfectly acceptable. It is only when it is undue that the law will
    intervene.
     Is difficult to define and requires a relationship between the parties, generally one of
    trust, confidence, vulnerability or dependency which came before the gift or contract
    and which one party exploits to get the contract or gift. Therefore, there needs to be
    a relationship between the parties where one party shall exploit to their benefit.
     The objective is to ensure that the influence of one person over another is not an
    abusive one.
     Actual undue influence abusing their position of power or authority to get another
    person to get into a contract – relationship of dominance that the free will of 1 party
    has been compromised.
     Presume undue influence is where undue influence is presumed to have been
    exerted because of the relationship of the parties. Relationship between victim and
    alleged wrong doer.

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