Chapter 8 Guidance on answering the questions in the book

Duress

1. In February, Samson agrees to make crucial deliveries of Tara's specialty candles for the pre-Christmas trade for £1,000. Samson fails to make a number of deliveries and explains that this is because he had a small heart attack (from which he has recovered but must take it easier) and because petrol prices had increased by 300% because of international events. He tells Tara that, unless she agrees to increase the price to £3,000 and reduce the number of deliveries by 40%, the deliveries would not be made. He adds: 'What we agreed just can't be done. I'll go bust or keel over and that's no use to you.' Tara reluctantly agrees as she feels she has no choice at this stage. Samson makes the deliveries. Advise Tara.

See 8.4 Economic duress: threats to breach a contract,

3.1.5 Contract modifications,

3.2.2.1 Promises to accept less – 3.2.2.2 Promises to give more.

This can be broken down into two issues:

  • Must Tara pay £3,000 rather than £1,000 (or less because of the reduced number of deliveries)?
  • Must Tara accept the reduced number of deliveries as full discharge of Samson's contractual obligations?

The main issue is the enforceability of these modifications:

  • If Samson can show that the contract has been discharged for frustration and the modifications were really a brand new contract about the same subject matter, then Tara would have to pay £3,000 for 40% less deliveries.  Has there been frustration?  What further facts do you need to know?
  • Re (i), is there consideration for Tara's promise to pay more?  Even if there is, has there been duress by Samson?  What further facts do you need to know?
  • Re (ii), is there consideration for Tara's promise to accept less?  Even if there is, has there been duress by Samson?  What further facts do you need to know? 

Does promissory estoppel prevent Tara from reneging on her promise?  What further facts do you need to know? 

2. How do the doctrines of economic duress, consideration, promissory estoppel and frustration apply in the context of one-sided contract modifications?

See 8.4 Economic duress: threats to breach a contract,

3.1.5 Contract modifications,

3.2.2.1 Promises to accept less – 3.2.2.2 Promises to give more

7.7 Hardship and contract modification: frustration, duress and consideration.

Here, you need to first be clear on the types of one-sided contract modifications.  Second, you need to map how each of these doctrines uphold or invalidate the different types of one-sided contract modifications.  Third, you need to focus on how the doctrines relate to each other; do the doctrines apply in any particular order (eg consideration then duress?  Is there any overlap in the factors each one takes into account?  Does the answer on one predispose the answer to another (eg if duress, then no estoppel)?  Is a more straightforward approach possible?

Take note of  Collier v Wright and MWB v Rock.

3. 'The current law on economic duress is a mess. It is unclear what pressure and how much pressure is required.' Do you agree?

See 8.4 Economic duress: threats to breach a contract

8.5 Other forms of economic duress.

This question invites you to assess the current state of the law on economic duress.  The sub-questions you should consider include:

  • Is the law on other categories of duress (to the person, to property) more straightforward?
  • What are the elements of economic duress (note that many cases of lawful act duress may also be described as ‘economic duress’, eg CTN Cash and Carry)?
  • What uncertainty, if any, surrounds each element (of illegitimate pressure, coercion and no practicable alternative)?
  • What are the policy considerations in economic duress cases (the pros and cons of enforcement when contracts are varied in one direction only)?
  • Does the current law balance the conflicting policies in an appropriate way?
  • If not, do you have any suggestions for reform?

4. How is, and how should, the line be drawn between threats of lawful action which are legitimate and those which are illegitimate, giving examples?

See 8.6 Lawful act duress.

This question invites you to critically analyse the category of lawful act duress.  The sub-questions you should consider include:

  • Is there judicial recognition of a category of ‘lawful act duress’?  If so, what is the justification?  What are the concerns surrounding such a category?
  • What types of lawful threats are not illegitimate (ie are legitimate)?
  • What types of lawful threats are illegitimate? 
  • How is the distinction made?
  • You will add another dimension to your answer by relating lawful act duress to the doctrines of undue influence and unconscionable bargains which, after all, involve defendant conduct which is not unlawful.