OCR A2 Law - The Law of Contract - Duress/Economic Duress (3)

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  • Created by: Majid
  • Created on: 11-05-13 21:48

Duress/Economic Duress (3)

Problems have arisen when distinguishing betwen legitimate and illegitimate (unfair) pressure. CASE: "The Universal Sentinel". In this case a transportation 'blacked' a ship, unless the owners of the ship paid a sum of money to the union welfare fund. HELD: This was ED as the pressure was illegitimate. Though the courts were uncertain between what legitimate and illegitimate pressure was and wasn't. Lord Diplock accepted that Duress could apply where a party was induced to enter the contract by illegitimate ED, unless once the pressure eased, the party affirmed the contract.

It seems since "The Siboen", the courts have relaxed the rules and they will accept commercial pressure so long as it leaves the victim with no choice. CASE: "Atlas Express v Kafco". In this case Atlas contracted with Kafco to deliver Kafco's basketwork to Woolworth's stores. It was estimated that there'd be 400-600 cartons when in fact there were only 200 and Atlas Express increased the price and refused to carry anymore without a minimum of £440 per load. HELD: Kafco's agreement was reached by illegitimate pressure known as ED.

AO2: This is a new area of law which is still evolvingand the principles are still unclear, which causes much uncertainty within the law. It may be that later cases have recognised the reality of the situation in commercial cases involving weaker parties with limited choices. It maybe hard, however to distinguish between real and commercial pressuer and normal 'cut and thrust' of commerical pressure. It is arguably unsatisfactory that such uncertainty exists, especially in the area of commercial and international trade where stakes are high and bargaining is tough. This means that judges do give large amounts of discretion to the judge in the way its applied because the law is unclear, so the evolving process od ED which seems to rely on a case-by-case basis which doesn't make the law certain or predictable. However, the criteria is set and it is pretty clear which allows remedies for businesses.

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