Duress, commercial pressure and the modern law

• Author: Z. McDowell
• Position: Lecturer, Faculty of Law, University of the West Indies
• Pages: 240-256

DURESS, COMMERCIAL

PRESSURE AND THE

MODERN LAW

Z.

MCDOWELL*

INTRODUCTION

Duress is said to be illegitimate1 pressure applied to a plaintiff which forces

him to enter into a transaction or give up his wealth under constraint. If it is

made out on any given facts, restitution will be ordered since the plaintiff

would not have given up his wealth voluntarily, but would have done so as a

result of the defendant's bad or unconscionable conduct. While this principle

seems straightforward enough, the subject of duress has nevertheless been

fraught with difficulty - often in relation to the types of pressure amounting

to duress; whether the applied pressure should be the reason or merely a reason

for the plaintiffs actions; and what sorts of interests could rightly be subsumed

under this head. In relation to the latter, the recent emergence of economic

duress and general judicial acceptance that it can suffice to set aside an

agreement appears to have taken over the role played by the doctrine of

consideration in contract law in the determination of whether contractual

modifications should stand or fall.

Lecturer,

Faculty

of

Law,

University

of

the

"West

Indies.

1

Illegitimate" has been defined by one commentator

thus:

'The word illegitimate conjures up

thoughts of

some

morally reprehensible activity which offends the

conscience

of

the

court. To

attempt

any

classification

of

such

unconscionable behaviour

is

meaningless.

Each situation

must

be viewed on its

merits

with the court

establishing de

facto

standards

of

conduct

predicated

on the nature of

the

parties' relationship

as

well

as their particular needs, infirmities

and

expectations"

- P.A. Chandler, in "Economic

Duress;

Clarity

01

Confusion?"

[

1989]

L.M.C.LQ. 270 at 272.

Duress has often been defined as a coercion of the will so as to vitiate

consent.2 This coercion of the will theory has been severely

criticised3

as being

an unsuitable test and has been regarded as merely "legal shorthand for the

judicial finding that a party has been subjected to an improper motive for his

action.' In fact, the same Lord Scarman who propounded the coercion of the

will theory in Pao On v. Lao Yiu Long said in The

Universe

Sentinel that:

"The classic case of duress is however not the lack of will to submit but the victim's

intentional submission arising from the fact that there is no other practical choice

open to him."

In

Crescendo

Management Pty Ltd. v.

Westpac

Banking Corp6 McHugh, J.,

stated that the overbearing of the will theory should be rejected - that the

proper approach was to ask whether any applied pressure induced the victim

to enter into the transaction and whether that pressure went beyond what the

law was prepared to countenance as legitimate. He defined pressure as consist-

ing of unlawful threats or pressure amounting to unconscionable conduct.

From an appreciation of some of the more significant decisions on the

subject, one may

say

that there are clear

cases

in which Lord Scarman's coercion

of the will theory applies, as for instance, cases in which urgent and pressing

necessity brought about by the defendant's conduct would have unfairly and

2 Per Lord Scarman in Pao On v. Lau Yiu Long [ 1980] A.C. 614, 635-636, found within the

following passage which represents the classic approach: "...in a contractual situation

commercial pressure is not enough. There must be some factor 'which could in law be

regarded as a coercion of the will so as to vitiate his consent' (quoting Kerr J. in The Siboen and

The Sibotre [1976] 1 Lloyd's Rep 293 at 336).... In determining whether there was a coercion

of will and that there was no true consent, it is material to inquire whether the person alleged

to have been coerced did or did not protest; whether, at the time he was allegedly coerced into

making the contract, he did or did not have an alternative course open to him such as an

adequate legal remedy; whether he was independently advised; and whether after entering the

contract he took steps to avoid it. All these matters are...relevant in determining whether he

acted voluntarily or not."

3 It is interesting to note that in the criminal law decision of Lynch v. D.PP. of Northern Ireland

[1975] A.C. 653 the House of Lords unanimously rejected the overborne will theory as the test

for duress. A full appreciation of their judgments would seem to indicate that their

understanding of the concept of duress was not peculiar to the criminal law but to the law in

general. For more, see P.S. Atiyah "Economic Duress and the 'Overborne Will"' (1982) 98

L.Q.R. 197.

4 R. Halson, "Opportunism, Economic Duress and Contractual Modifications" (1991) 107

L.Q. R. 649 at 666.

5 [1983]

1

A.C. 366 at 400. See also Donal Nolan, "Economic Duress and the Availability of a

Reasonable Alternative (Huyton v Peter Cremer)" [2000] R.L.R. 105.

6 (1988) 19

N.

S.W. L.R.40.