THE PRINCIPLE OF DURESS AND UNDUE INFLUENCE

In contract law, duress refers to situations where one party is forced or threatened
into entering a contract against their will. This coercion undermines the voluntary
nature of their consent, which is a fundamental principle in the formation of valid
contracts. If a contract is entered into under duress, it is considered voidable at the
option of the coerced party Duress is a common law concept which enables a
person who has entered into a contract as a result of threats, to treat the contract as
voidable. Originally the concept of duress was based on threats of criminal
activity. Thus, Chitty on contract (26th ed), Vol 1, para 5041 states: “Duress of the
person may consist violence to the person or threats of violence, or in
imprisonment whether actual or threatened. In contract law, duress refers to
situations where one party is forced or threatened into entering a contract against
their will. This coercion undermines the voluntary nature of their consent, which is
a fundamental principle in the formation of valid contracts. If a contract is entered
into under duress, it is considered voidable at the option of the coerced party.
Duress is a common law concept which enables a person who has entered into a
contract as a result of threats, to treat the contract as voidable. Originally the
concept of duress was based on threats of criminal activity. In Halbury’s Laws of
England (4th ed), Vol 9, para 2972 we have this definition: “By Duress is meant the
compulsion under which a person acts through fear of personal suffering as from
injury to the body or from confinement actual or threatened.” The above
definitions of duress were re-echoed by our Court of Appeal in Board of Directors
of Orthodox Secondary School of Peki v Tawlma-Abels3, CA thus: “It is not every
type of duress or coercion which suffices at common law to nullify the consent of a
party to a contract and thereby nullify the contract. It is only actual or threatened
physical violence to, or unlawful constraint of, the person of the contracting party
which will suffice for the purpose; and even then, what is threatened must be
unlawful.” The essence of duress is that it coerces the will of one of the parties,
meaning that their decision to enter into the contract is not made freely and
voluntarily. Instead, it is made under pressure or threat, which vitiates the genuine
consent required for a valid contract. At common law, duress was said to consist
of actual or threatened violence to the person, threats of imprisonment or
1
Chitty on contract (26th ed) Volume 1 paragraph 504
2
Halbury’s Laws of England (4th ed), Vol 9, para 297
3
Peki v Tawlma-Abels [1974] 1 GLR 419 at 423
prosecution or threats of violence or dishonor to a person’s wife, husband or
children. In Kaufman v. Gerson4:
The plaintiff sued on a contract made between himself and the defendant in a
foreign country. It was found that the plaintiff had coerced the defendant into
signing the contract by threats of Criminal prosecution against her husband for an
offence that the husband had committed. In fact, the consideration for the contract
between the plaintiff and the defendant was that the plaintiff would not prosecute
her husband. The court would not enforce the contract on the ground that the
defendant’s consent was obtained by duress. It must be established that the plaintiff
was induced by the threats to enter into the contract which he sought to rescind. In
other words, it must be established that the threats were a reason for the plaintiff
entering into the contract with the maker of the threats. Therefore, at common law,
to constitute duress, the plaintiff must establish that:
1. There was a threat by the Defendant against the plaintiff.
2. That the threat was of a criminal Nature; and
3. That the plaintiff executed the contract as a result of the threat.
However, it is not required that it be shown that the threat was the only reason for
entering the agreement. In Barton v. Armstrong5:
The respondent, Armstrong, the former Chairman of a company, threatened to kill
the appellant, Barton, the Managing Director of the company did not agree to pay a
large sum to Armstrong in cash and to purchase Armstrong’s shares in the
company. There was some evidence that Barton thought the proposed agreement
was a satisfactory business arrangement for the company. The deed of agreement
was executed and later Barton sought to have it rescinded on grounds of duress.
The court held that duress such as the respondent’s threats were a sufficient reason
for the appellant executing the deed. He was entitled to relief, even if there were
other factors which induced him to enter into the contract.
It must be noted that the threat need not emanate from the defendant, it is sufficient
if it emanates from a third party provided the Defendant knew about the threat.
This was established in the case of Hemans v. Cofie6.In the Universe Sentinel
4
Kaufman v. Gerson [1904] K.B 591
5
Barton v. Armstrong [1975] 2 W.L.R. 1050; [1975] 2ALL E.R 465
6
Hemans v. Cofie [1975] 2 GLR 310 (CA)
[1983] 1 AC 3667, for example, trade union officials threatened to induce the crew
of a ship to break their contracts of employment and so to prevent the ship from
leaving port. In view of the catastrophic financial consequences which the
shipowners could suffer if these threats were carried out, it was conceded that the
threat constituted “economic duress” vitiating the ship owners’ consent to an
agreement to make certain payments to the union. In recent times, the courts have
recognized economic duress as a factor which may render a contract voidable,
provided that the conduct which constitutes such duress must always amount to a
coercion of will which vitiates consent. In cases where a party is induced to enter a
contract ss a result of a threat by the other party to break an earlier contract, this
may constitute economic duress and entitle the party threatened to avoid the
contract made.
In D & C Builders Ltd v. Rees8, where the debtors had taken advantage of the
creditors’ financial situation and threatened to refuse to pay at all if the creditor did
not accept the part payment in full satisfaction of the existing debt, it was held that
the creditors’ promise to accept the part payment in full satisfaction of the debt was
obtained by duress and the creditor could set the contract aside.
In North Ocean Shipping Co v. Hyundai Construction Co Ltd9 the facts were as
follows:
The defendants, a firm of shipbuilders, had agreed to build a tanker for the
plaintiffs, who were ship owners. It was agreed that the contract price was $30
million, payable in five instalments. After the plaintiffs had paid the first
instalment the international value of the dollar fell drastically and the defendants
demanded an increase of 10% in the price and threatened not to complete the ship
if it was not paid. The plaintiffs had made a profitable contract to charter the ship
upon completion and so could not afford the risk of any delays. The plaintiffs,
therefore, even though advised that the defendants had no legal right to claim the
additional 10%, paid the defendants the original price and the extra 10%. Some
eight months later, they brought the action to recover the additional 10% they had
paid to the defendants.

7
Universe Sentinel [1983] 1 AC 366
8
D & C Builders Ltd v. Rees [1966] 2 Q.B. 617; [1965] 3 ALL E.R 837
9
North Ocean Shipping Co v. Hyundai Construction Co Ltd [1979] Q.B. 705; [1978] 3 ALL E.R.1170
The court held that in principle this was a case of economic duress, since the threat
not to build the ship was both wrongful and highly coercive of the plaintiff’s will.
It was held, however, that the plaintiffs had lost their right to set the contract aside
by their affirmation of the contract.
In Pao On and Others v. Lau Yiu Long and Others10, Lord Scarman stated:
Duress, whatever form it takes, is a coercion of the will so as to vitiate consent.
[I]n a contractual situation, commercial pressure is not enough. There must be
present some factor “which could in law be regarded as a coercion of his will so as
to vitiate his consent” .... In determining whether there was coercion of will such
that there was no true consent, it is material to inquire
1. Whether the person alleged to have been coerced did or did not protest;
2. 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 see Pau On v Lau Yiu Long (supra);

3. Whether he was independently advised; and

4. Whether after entering the contract he took steps to avoid it. All these
matters are, as was recognized in Maskell v Homet [1914] All ER Rep 595
11
relevant in determining whether he acted voluntarily or not.
Duress in contract law fundamentally deals with the coercion of the will,
undermining the voluntary nature of consent required for a valid contract. Legal
principles and case law illustrate that for a claim of duress to succeed, the pressure
exerted must be illegitimate and must have left the person with no reasonable
alternative but to comply. By ensuring that agreements are made freely and
voluntarily, the doctrine of duress upholds the integrity of contractual consent and
the fairness of contractual relationships.

10
Pao On and Others v. Lau Yiu Long and Others [1980] A.C. 614; [1979] 3 W.L.R. 435.
11
Maskell v Homet [1914] All ER Rep 595