OCR A2 Law - The Law of Contract - Duress/Economic Duress (2)

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  • Created by: Majid
  • Created on: 11-05-13 21:26

Duress/Economic Duress (2)

CASE: "D&C Builders v Rees". In this case it was discussed obiter that part-payment by cheque was no different to part-payment by cash. HELD: Lord Denning went onto say as no agreement was set aside there wasn't a true agreement as Rees took advantage of the builders financial position by forcing them to accept part-payment i.e. implying improper pressure and giving them "no choice" but to accept.

The HofL confirmed this principle in... CASE: "Siboen v Sibotre". In this case charters demanded a renegotiation of their contract saying they'd take their business elsewhere leaving the ship owners with no choice but to agree. HELD: This amounted to ED and approved "D&C Builders v Rees". Following this a 2-tier test was developed in order to establish whether ED had occured. They were whether the party alleging ED had protested immediately and did they openly argue about it. These were obiter statements.

Following this, the courts felt in Sibeon that the victim had to protest at the time of the pressure. Confirmed in CASE: "The Atlantic Baron". In this case a shipyard agreed to build a tanker to be paid in 5 instalments. After the 1st payment, the shipyard demanded an increase in price. The shipping company reluctantly agreed and months later they tried to sue to recover the extra money they'd paid. HELD: It could have amounted to ED, but the delay meant the contract had been affirmed and so their remedy was lost. The Lords confirmed this approach as good law in CASE: "Pao On v Lau Yiu Long". In this case Lord Scarman said for the claim of ED to succeed it must amount to a "corecion of will which vitiates consent". In other words it must meet the following criteria. HELD: 1st the victim must protest, secondly look for an alternative, thirdly seek independent advice and finally attempt repudiation.

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