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Duress, Undue Influence, Capacity - Coggle Diagram

- - - - dont need "but for", as long as they contributed to decision
    - - A was chairman, made death threat to B to persuade B to buy A's share
      - B bought, claim duress
      - A liable, even though it was not but-for cause
        
        only need to be one of the reason
        
        even though B might still enter contract anyways
        
        more generous causation
      - can set aside contract
      - the more illegitimate the means (physical violence) the more easier court favor C
  - - - goods that I suppose to give u, but u pay late, I hang on to those goods to induce payment
    - - unlawful detention of goods wont necessary = duress
      - tenant owed money to landlord, landlord seize tenant's good
      - tenant enter into new contract to pay, but wanna set it aside
      - court: no duress, ET unlawful detention
        
        but later move away from this
    - - move away from Skeate
      - unlawful detention ENUF to constitute duress
      - the ship will be blacklisted unless owner increase pay
      - owner sought duress to voidable contract
      - overturn Skeate, limitation of duress on unlawful detention/seizure of goods no longer good law
  - - - threat to breach existing contract
      - or threat to disclose information (blackmail)
      - basically just a threat to do smtg which is itself unlawful
    - - main contractor has penalty clause (have to pay large money if building not complete on time)
      - subcontractor: if u give more money can get work done
      - CA: there is consideration, some ppl think its duress
        
        threat to breach contract unlawful --> illegitimate
      - subcontractors are not schemers, just incompetent
        
        whats the role of intention?
      - presence of consideration is not fatal to finding econ duress
    - - illegitimate pressure of threat to do smtg lawful
      - two circumstances
        
        1) D uses his knowledge of C's criminal activity
        
        lawful to report crime, basically blackmail
        
        2) existing contractual relationship, one person breach, say to other party: waive damage, or we wont enter new contract w u
        
        lawful to refuse contract or ask ppl to forgive
        
        B risk losing lucrative contract
        
        D expose themselves to civil claim, D maneuver C into position of vulnerability where C has to waive
        
        WORK ENDS HERE
    - - were making massive losses
      - D agree to reduce rate, try to get out of agreement
      - D propose a new rate, arguing that C is duress, threatening them for a lower rate or theyll bankrupt
      - NOT valid duress, wasnt enuf
      - the pressure have to derive him from his free consent to contractual terms
        
        did the victim protest at the demand
        
        did he always want to go back on what he agree to
      - the court: party enter into it willingly
        
        if they dont like it, just nature of commercial negotiation
    - - Huyton SA v Peter Cremer GmbH
        
        arbitration clause: go to arbitration if dispute
        
        agreement of wheat
        
        H threaten to not pay for wheat unless C agree to not arbitrate
        
        Issue: is H entitled to not paying?
        
        YES, H entitled, not threatening to breach
        
        NOT illegitimate threat --> NOT econ duress
        
        threats to breach contract not automatically illegitimate
      - must be threat to do something independently wrongful
        
        e.g. breach a contract
      - R v AG for England and Wales
        
        V was former member of SAS, captured by foreign force
        
        book written, gov dont want disclosure
        
        told member to sign NDA or else reduce pay (lawful action of military, in employment contract)
        
        D argue duress
        
        pressure harsh but NOT illegitimate
        
        was in their contract & the nature of military
        
        member has a choice to sign or not
    - - if you already pay, can only depend on economic duress
    - - 1) illegitimate threat; which
      - 2) subjectively caused A to contract (but for); and where
      - 3) objectively A has no reasonable alternative but to contract
        
        this is not in Duress to the person
    - - Huyton
        
        EI the threat was illegitimate, was NOT decisive cause of seller agree to give up arbitration
        
        NO illegitimate threat + NO but for cause
        
        it needs to be A reason and THE reason
      - But for cause
        
        were it not for the illegitimate threat, V would not have agreed
  - - - TT sell pakistan tickets to get commission
      - airline owed TT large sum, terminate existing contract (theyre entitled to)
      - then offer TT new contract but only IF TT agree to waive claims for commission under old contract
        
        TT agree, but later sought duress to set aside new contract
      - SC: NOT lawful act duress
        
        1) lawful act econ duress exist
        
        2) three element for lawful act econ duress
        
        illegitimate threat
        
        sufficient causation
        
        threatened party had no reasonable alternative
        
        3) as the threat is lawful, the illegitimacy of threat is determined by focusing on the justification of the demand
        
        4) demand motivated by commercial self-interest is generally justified
        
        Lawful act econ duress: rare exceptional cases where a demand, motivated by commercial self-interest, is nevertheless unjustified
        
        very restrictive
      - Lord Hodge: 2 example of possible lawful act duress
        
        1) The ‘blackmail’ pattern: where D exploits knowledge of criminal activity to make a demand of C
        
        (Williams v Bayley (1866)): C forged father signature, Bank try force father pay by threaten to report C --> illegitimate pressure - lawful act duress
        
        2) D uses illegitimate means to manoeuvre C into a position of weakness to force them to waive an existing claim against D
        
        Progress Bulk Carriers v Tube City IMS (The Cenk Kaptanoglu)
        
        D (shipowner) contract w C (charterer)
        
        D breach, gave ship to other
        
        D promise replacement for C, time whent by, C more desperate, D offer to give if C agree to waive claim against D for repudiation
        
        C agree
      - EI there was reprehensible behaviour, don’t forget 2) subjective causation and 3) no reasonable alternative for C
        
        3) can used to defend decision in TT; TT had reasonable alternative but just didnt take
      - Lord Burrows: if in bad faith, = lawful act duress
        
        focus on bad faith
        
        ‘the demand is unjustified, so that the lawful act economic threat is illegitimate where:
        
        first, the threatening party has deliberately created, or increased, the threatened party’s vulnerability to the demand; and,
        
        secondly, the “bad faith demand” requirement is satisfied’
- - - - prove that there was guiding/leading
  - - - reverse burden of proof
    - - (a) relationship +
      - (b) suspicious transaction that ‘calls for an explanation’,
      - unless (c) presumption is rebutted
    - - nun transfer all property to mother superior
      - left convent, claim UI
      - voidable because of undue influence
        
        nature of relationship (mother superior vs new nun)
      - presumed undue influence doesn’t involve wrongdoing
        
        undue influence is not about cheating or misconduct
        
        just wrongful to abuse your position without ensuring the other party is acting freely and independently
      - Court found there was no wrongdoing on the part of the mother superior
    - - Relationship
        
        Class 2A: certain stereotypical relationships automatically count, whatever the circumstances
        
        solicitor v client
        
        Nature Resorts v First Citizens Bank
        
        A argue UI, his lawyer would profit from this situation
        
        rebutted the presumption
        
        C was NOT acting under the undue influence of the bank's lawyer
        
        was exercising a free and independent judgment, which rebutted the presumption of UI
        
        and C also derive benefit
        
        one lawyer acting for all parties in a transaction
        
        spiritual advisor v novice
        
        Allcard v Skinner
        
        doctor v patient
        
        Husband and wife NOT in class 2A
        
        relationship of trust and confidence is not on its own sufficient to give rise to a presumption of UI
        
        Class 2B: where on the particular facts it is shown that one party reposed trust and confidence in the other
      - Transaction
        
        Suspicious transaction that ‘calls for an explanation’
    - - Party A exercise power over B, B has no free choice
      - is the relationship = so much pressure/trust/faith party B has no consent?
      - wife enter mortgage w strong encouragement from husband
        
        how does that affect 3P?
      - Etridge Protocol
        
        bank should ascertain wife have independent legal advice, she has all info + freedom to choose
- - - - e.g. food, college accommodation etc
  - - - S1: the person should assumed to have capacity unless you prove otherwise
      - can't get out of contract just cuz its bad deal
    - - no discrimination
  - - - mistakenly transfer house to nephew's business partner instead of nephew
      - 1) must be proven that the person signing was not negligent
      - 2) fundamental difference between what was signed and what was thought to be signed
      - HoL found AGAINST old lady
        
        NOT radically different - she want to give away her right anyways
        
        non est factum very narrow
    - - Non est factum applies when person sign doc w/o understanding its nature
      - not just not understanding content or effects
      - in this case Mr O knew he was signing doc to purchase car, EI did not fully understand the terms
      - => Non est factum REJECTED
        
        WORK ENDS HERE