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Can You Threaten Your Way into a Contract? 🄊

PLUS: Math & Music, The Last Humans Standing, and Lost in Translation 🧠

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  • Can You Threaten Your Way into a Contract? 🄊

  • PLUS: Math & Music, The Last Humans Standing, and Lost in Translation 🧠

LAW

Can You Threaten Your Way into a Contract? 🄊

If I threaten to hurt someone if they don’t agree to make a contract with me, would the subsequent contract be valid? This is where ā€œduressā€ comes into play. If a person was threatened or pressured to the point where they were compelled to enter the contract with no practical alternative, the contract will be voidable. It is important to note that ā€œvoidableā€ and ā€œvoidā€ mean very different things in law. A void contract is completely nullified as if it never existed. A voidable contract is still enforceable but gives one party the right to rescind or affirm it. So, if A sold their car to B under duress and B sold it to C in good faith before A could rescind the contract, A cannot recover it from C since the contract was valid at that point. However, if the contract is void, A could recover it from C; since the contract was unenforceable, B wouldn’t have had the title to sell it to C.

Threaten Kerry Washington GIF by HULU

šŸ’” Things to consider

  • What Constitutes Duress? The House of Lords in The Universe Sentinel [1983] 1 AC 614 stated that duress occurs where there’s an illegitimate pressure that induces the party to enter the contract. Under Barton v Armstrong [1976] AC 104, actual or threatened violence to a person in a close relationship with the claimant, or the claimant themselves, will amount to illegitimate pressure. This pressure must have been a reason for entering into the contract but doesn’t need to have been the sole or main reason. Alternatively, if the threats were against property rather than a person, then the threats must be a significant cause for their entry into the contract (Dimskal Shipping Co SA v International Worker’s Federation, The Evia Luck [1992] 2 AC 152).

    Nervous Gordon Ramsey GIF by BBC

    But really … lots of pressure.

  • Economic Duress: This form of duress requires threats to a person’s finances, e.g. one party threatens to breach an existing contract unless it’s renegotiated. As noted in The Universe Sentinel, alongside the other requirements mentioned above, the claimant must have no practicable alternative. This is a lot narrower than other forms of duress since economic pressure can be both a useful and necessary negotiation tool, so it’s only considered economic duress where it’s completely unconscionable. For instance, If A agrees to sell B a rare car for Ā£20, C then offers A Ā£30 for it, and A threatens to take the higher offer unless B pays Ā£50 instead, which B then does, this will likely constitute economic duress. However, as was the case in Williams v Roffey Bros & Nicholls [1991] 1 QB 1, if A paid B for refurbishments with a monetary penalty for lateness, B subcontracts to C, but C then faced monetary problems that made it impossible to finish on schedule and asked to renegotiate their contract, there wouldn’t be economic duress.

  • Lawful Act Duress: What if the threat was to do something completely legal, e.g. I will tell the police you stole my cat, if you don’t buy me a new cat? This form of duress was most recently brought to the Supreme Court in Times Travel (UK) Ltd v Pakistan International Airlines Corporation [2021] UKSC 40, but none of the judges could really decide what actually constitutes lawful act duress. So, it is easiest to say that it’s very rare but the more unfair the demand from the person causing the duress, the more likely it is to be lawful act duress; what matters is whether the pressure can be justified, but the boundary is unclear.

    White Cat Hello GIF

    She’s MY cat.

šŸ”Ž Find out more

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That’s it for this week! We’d like to thank this week’s writer: Heidi Nicholas.

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