Economic duress

Economic duress refers to the pressure of economic threat towards the contracting parties.

Duress refers to pressure, especially of a physical nature, to act in a certain way.

In contract law, duress refers to the actual violence or the threat of violence towards the contracting party or people close to the contracting party, having the effect of allowing the contract to be avoided.

Economic duress refers to the pressure of economic threat towards the contracting parties.  The Courts now acknowledge that this economic duress could affect conduct and force a party to sign a contract.

This undue commercial pressure or economic duress allows the innocent party to rescind the Contract.

Economic duress was first recognised, but not accepted, in The Sibeon and The Sibotre (1976).

Threats were made by the hirers of the two ships saying that unless the cost of hire of the ships was lowered they would be unable to trade and would go bankrupt. They maintained they had no significant assets.

This, in effect, would have left the owners of the ships with no alternative other than to lay up their ships leaving them unable to meet their commitments.

These threats by the hirers were false as the hirers would not have gone bankrupt simply because of the high rates of hire.

The court took the view that the owner's will and consent had not been 'overborne' by what was ordinary commercial pressures.

 

 

Related Items

The items below list this as being related in some way.

Amazon's recommended Books

RSS Feeds