Dyson J set out the principles applicable in establishing a pleading of commercial duress: (i) Economic pressure can amount to duress, provided it may be characterised as illegitimate and has constituted a ‘but for’ cause inducing the claimant to enter into the relevant contract or to make a payment. See Mance J in S.L. Huyton S.A. v Peter Cremer GmbH & Co [1999] 1 Lloyds Rep 620;
(ii) a threat to break a contract will generally be regarded as illegitimate, particularly where the defendant must know that it would be in breach of contract if the threat were implemented;
(iii) it is relevant to consider whether the claimant had a ‘real choice’ or ‘realistic alternative’ and could, if it had wished, equally well have resisted the pressure and, for example, pursued practical and effective legal redress. If there was no reasonable alternative, that may be very strong evidence in support of a conclusion that the victim of the duress was in fact influenced by the threat.
(iv) the presence, or absence, of protest, may be of some relevance when considering whether the threat had coercive effect. But, even the total absence of protest does not mean that the payment was voluntary.
and ‘The ingredients of actionable duress are that there must be pressure, (a) whose practical effect is that there is compulsion on, or a lack of practical choice for, the victim, (b) which is illegitimate, and (c) which is a significant cause inducing the claimant to enter into the contract: see Universal Tanking of Monrovia v. ITWF [1983] AC 336, 400 B-E, and The Evia Luck [1992] 2AC 152, 165 G. In determining whether there has been illegitimate pressure, the court takes into account a range of factors. These include whether there has been an actual or threatened breach of contract; whether the person allegedly exerting the pressure has acted in good or bad faith; whether the victim had any realistic practical alternative but to submit to the pressure; whether the victim protested at the time; and whether he confirmed and sought to rely on the contract. These are all relevant factors. Illegitimate pressure must be distinguished from the rough and tumble of the pressures of normal commercial bargaining.’
Date: 28-Jul-2000
Judges: Dyson J
Links: Bailii,
References: [2000] EWHC 185 (TCC), [2001] BLR 23, [2000] BLR 530
Cited By:
- Kolmar Group Ag -v- Traxpo Enterprises Pvt Ltd, ComC, Cited, (Bailii, [2010] EWHC 113 (Comm))
- Adam Opel Gmbh and Another -v- Mitras Automotive (UK) Ltd, QBD, Cited, (Bailii, [2007] EWHC 3205 (QB), [2008] Bus LR D55)
- Carillion Construction Ltd -v- Felix (UK) Ltd, , Approved, ([2001] BLR 1)
- Progress Bulk Carriers Ltd -v- Tube City IMS Llc, ComC, Cited, (Bailii, [2012] EWHC 273 (Comm))
