Please enable JavaScript.

Coggle requires JavaScript to display documents.

economic duress - Coggle Diagram

- - - - Did the person claiming to be coerced protest about the pressure?
      - did that person have any other available course of action which was reasonable?
      - was he/she independently advised before taking the action?
      - after entering into the contract, did he/she take steps to make the contract void?
      - Pao on v Lau Yiu Long (1979)
        
        this was a dispute about the terms of the purchase of a business and a guarantee was given to the seller protecting against a fall in share price
        
        court set out factors to help decide whether economic duress was present
  - - - court upheld their claim. conduct of the ship owners had to be viewed in the light of their initial breach of contract and their willingness to take advantage of the consequences of that breach. this was 'illegitimate' pressure, even if not unlawful in itself
- - - - court must distinguish between legitimate commercial pressure and economic duress
  - - - threats must be 'improperly coercive', though not necessarily unlawful
        
        difficulty is in deciding when line has crossed between 'tough business bargaining', exploiting weaknesses to advantage, and use of improper pressure
- - - - commercial pressure is not enough!
- - - - restitution is an equitable remedy which restores a person the the position they would have been in without the other party's improper action
        
        because it is an equitable remedy, it is discretionary, as we have seen for recission
- - - - can be seen in:
        
        Universe Tankships Inc. of Monrovia v International Transport Workers Federation (The Universe Sentinel) (1983)
        
        Vessel, The Universe Sentinel, was threatened by the International Transport Workers Federation (ITWF) as it was a vessel sailing under what ITWF regarded as a flag of convenience
        
        threat that unless the owners of vessel comply with ITWF'S demands to rates of pay & other terms of employment of the crew, and also to paying money into a workers' welfare fund, they would not tug the ship so it could not leave the port.
        
        court decided money had been extracted as result or economic duress and must be repaid.