Economic duress

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Economic duress: where one party makes threats (to person's financial wellbeing) of an economic nature to the other party in order to form or change an agreement.

Threats to coerce party into contract have been long recognised at common law.

  • A contract agreed under economic duress cannot be recognised as a true or real agreement between the parties
  • Lord Kerr in The Sibotre described economic duress as 'such a degree of coercion that the other party was deprived of his free consent and agreement'
  • Pressure to negotiate and enter into contracts are a fact of business life.
  • Sometimes it may be difficult to identify the line

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