OCR A2 Law - The Law of Contract - Duress/Economic Duress (1)

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  • Created by: Majid
  • Created on: 11-05-13 21:13

Duress/Economic Duress (1)

Intro: The essay/problem/dilemma involves the Law on Vitiating Factors (VF). A VF is one which invalidates an otherwise perfectly formed contract.

Duress: At Common Law Duress can be actual or threatened, physical violence. It is where a party enters a contract without their free will, ... their consent is vitiated. Cases rarely come to court but duress can be seen in following cases:

CASE: "Cumming v Ince". In this case an inmate in a medical asylum was forced to sign over her house or she was threatened that she would stay in the asylum. HELD: The contract was set aside as it wasn't made out of her own free will.

CASE: "Barton v Armstrong". In this case the managing director was told if he didn't buy shares in the company he'd be killed. HELD: He didn't have to pay for the shares as the agreement was obtained by duress.

AO2: The definition of Duress is very narrow and only covers those specific situations, as a result the law has developed.

Economic Duress (ED): ED is pressure illegitimately exerted from one business to another, i.e. by forcing new terms or threats in order for someone to breach a contract. ED can make contracts voidable. Lord Denning first discussed this idea in regards to putting pressure where parties have inequality of bargaining powers. This has been developed by the courts of Equity.

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