Topic 3: Duress & Undue Influence

Topic 3: Duress & Undue Influence Duress 2 Elements 1. One party exerted pressure on another 2. This pressure was illegitimate v The threat must be unlawful – if it consists of something within the legal rights of the other it will not amount to duress. Categories: 1) Personal 2) Goods 3) Economic DOMINANCE Majority of contracts - one party is in a stronger bargaining position. • business owner in shopping centre faced with steep rent increase but no choice to go elsewhere. These topics are not with a one sided bargain per se except where the bargain is brought about by an abuse of a dominant position. • unreasonable coercion. Unequal bargaining – but no one doesn’t have a choice. Not mere unequal bargaining power. Threshold – point where the dominance is an abuse beyond which the law is not prepared to accept. ELEMENTS 1. Defendant used a form of illegitimate presume, physical, economic or psychological, in order to compel P to assent to a transaction; 2. that pressure left P with no reasonable alternative but to assent to the transaction; and 3. the pressure induced P to assent to the transaction or was a contributing cause of P assenting to it. 4. Once these elements are established, P may seek to have the transaction set aside. Duress may shade into undue influence, or unconscionable dealing. * Duress makes a contract voidable; the threatened party is entitled to rescind within a reasonable time. Failure to do so may lead to the conclusion that the contract has been affirmed, with the right to rescission lost