Duress

1. The justification for duress is based on the coercing party’s blameworthy conduct in inducing the claimant’s consent to the contract, rather than the claimant’s will being ‘overborne’.

2. The elements of duress are:

  1. the coercing party’s application of illegitimate pressure
  2. which causes (induces) the claimant to enter the contract; and
  3. the claimant had no practicable alternative but to submit to the demand (although this seems only necessary in economic duress cases).

3. Duress to the person always amounts to illegitimate pressure; causation is satisfied if the threat was ‘a’ reason for the victim’s decision to contract.

4. Duress to property always amounts to illegitimate pressure; causation is satisfied if the threat was asignificant cause’ of the victim’s decision to contract, although this is readily inferred.

5. In practice, the most important and difficult category is economic duress in the context of renegotiations of contract induced by threats to breach. Such threats are currently regarded as illegitimate and duress is only excluded if the claimant cannot satisfy the higher requirement of causation (at least ‘but for’ causation) or she has a practicable alternative. This approach is open to criticism, and alternatives focusing on the legitimacy of the coercing party’s threat can be suggested by asking whether the coercing party: (a) acted in good faith; or (b) had a practicable alternative to seeking renegotiation in order to complete her contractual performance.

6. A threat of lawful action (eg not to contract or waive existing rights, or to sue) is normally legitimate, but it may be illegitimate if it is ‘immoral or unconscionable’. Indirect examples are provided by the blackmail analogy, salvage cases and cases involving threats to prosecute or disclose traditionally dealt with as actual undue influence.

7. The orthodox position is that substantive unfairness (in the content of the transaction) is irrelevant to cases of duress. However, it has force (behind the label of ‘the demand’) as evidence of the illegitimacy of the threat and of the causal effect of a threat.