University of Queensland Law of Contract B

Duress to Goods

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  Can recover goods as well as money paid to prevent unlawful seizure or to obtain release (in restitution): Astley v Reynolds.
  
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  Can be used to avoid contract (Siboen overruling Skeate); threat need not be express, reasonable belief enough: Hawker Pacific.
  
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  Needs to be a cause.
  

Economic Duress

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  Two situations:
  
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    1) P has made payment under ED in absence of contract or contract without consideration (unjust enrichment)
    
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    2) Contractual modification
    

Payments

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  Smith v William Charlick – recognized possibility but was no illegitimate pressure.
  
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  Cf White Rose Flour Milling – threatened to not supply in breach of contract- ED.
  
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  TA Sundell v Yannoulatos – Money can be recovered.
  

Contractual modification

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  Siboen & Sibotre – economic duress can be used to rescind, not just recover payments. Same result in Pao On v Lau Yiu Long.
  

When is there economic duress/commercial pressure?

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  Crescendo per McHugh J:
  
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    1) Did pressure applied induce victim to enter contract or modify existing one?
    
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    2) Did pressure go beyond what law prepared to countenance as legitimate?
    
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  Does pressure have to be unlawful? Or is illegitimate pressure wider?
  
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  Threatening to breach contract is unlawful (Furphy v Nixon) but may not be if done in good faith (Mitchell per Keane JA).
  
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  Kirby P in Equiticorp – scrap duress and deal with under other doctrines.
  
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  Karam – NSWCA limited duress to threatened or actual unlawful conduct.
  
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  Woodside – Murphy J limited it to conduct unlawful/wrongful according to some external legal standard. McLure P (Newnes JA agreeing) – if actual/threatened unlawful conduct, prima facie illegitimate. If lawful conduct, maybe illegitimate if no reasonable/justifiable connection between pressure applied and demand. HC decided on other grounds.
  
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  Mitchell v Pacific Dawn – Keane JA – duress and unconscionable conduct are distinct doctrines.
  

Protest

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  McHugh JA in Crescendo – non-definitive factor. Windeyer J in Mason v NSW – relevant to whether acted freely/under compulsion; non-conclusive factor.
  

Commercial Pressure

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  Siboen & Sibotre (1976)– asked to reduce charter cost; charter market particularly bad. Mere commercial pressure.
  
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  Atlas v Kafco (1989)– A underquoted price. Asked for more or wouldn’t deliver. Christmas time. Found economic duress.
  
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  Reconciling them?
  
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    Timing – courts have become more willing to find ED.
    
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    Charter market’s bad state may have been an important factor.
    
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    In Siboen they asked for less. In Atlas they asked for more; owner had to pay because was 80% of business.
    

Causal Link

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  McHugh JA in Crescendo cited Barton and said a cause.
  
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  Burchett J (FI) in News v Aust Rugby Football League cited Lord Goff in Evia Luck and said significant cause (preferable).
  

Remedies

Rescission

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  Standard. But, if pressure subsequently lifted and contract affirmed, not available (Atlantic Baron).
  
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  Payments under contract recoverable, otherwise - restitution.
  

Restitution

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  Not available until after the contract has been rescinded: Evia Luck.
  

Damages

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  Universe Tankships – preferable view is Lord Diplock- damages not available unless pressure is also a tort.
  
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  ACL s 20(1) – unconscionable conduct within meaning of common law.
  
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  ACL s 50- physical force/undue harassment/coercion with supply/payment of goods/services or land interest.
  
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  Excite Mobile – fell under both provisions.
  

Undue Influence

What is it?

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  Never been defined (Allcard v Skinner per Lindley LJ). If defined, people will avoid it (Chesterfield v Jannsen per Lord Hardwick).
  
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  Allcard per Lindley LJ: “some unfair and improper conduct, some coercion from outside, some overreaching, some form of cheating and generally, though not always, some personal advantage obtained by a donee placed in some close and confidential relation to the donor.”
  
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  Johnson v Buttress per Dixon J: “unconscientious use of any special capacity or opportunity that may exist or arise of affecting the alienor’s will or freedom of judgment in reference to such a matter.”
  
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  Influence itself is not per se objectionable: Allcard per Kekewich J.
  
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  Balance between autonomy and protection by court (see Kakavas). Court won’t help you get out of a bad bargain.
  
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  But not necessary to show loss of autonomy: Tufton v Sperni.
  

Categories

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  See Lord Nicholls in Royal Bank of Scotland v Etridge (No 2).
  
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  Johnson per Latham CJ:
  
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    1) Actual undue influence
    
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    2) Presumed undue influence (then have to rebut)
    
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      From recognized categories
      
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      Relationship of influence