9. Duress and undue influence

If a person is coerced so that they did not enter the contract of their own free will, they can ask the court to set it aside. The older common law of duress looked for violence to the person, or threats of it. Cumming v Ince and later threats cases sit in that line. A threat to prosecute, or to ruin a relative, can be just as coercive. Williams v Bayley is the father's promissory note extracted by a threat to prosecute his son.

Economic duress

Economic duress is business pressure that leaves no practical choice. What is required is an unlawful or illegitimate threat, that the threat overcame the will, and that the victim had no practical alternative. A hard bargain, by itself, is not enough. The contract is voidable if that is proved.

The cases are commercial. Occidental Worldwide Investment v Skibs (The Siboen and The Sibotre), North Ocean Shipping v Hyundai Construction (The Atlantic Baron), Pao On v Lau Yiu Long, and Dimskal Shipping v ITF. A threat to break a contract can be illegitimate pressure. The victim should protest and, once the pressure is off, act quickly. Delay, or affirming the contract, loses the right. The Atlantic Baron was lost on affirmation.

Remedies follow the voidable contract. Rescission, so far as the parties can be put back, and restitution of benefits conferred. Damages are not the primary contract remedy for the duress itself.

Undue influence

Equity thought common law duress too narrow. Undue influence covers pressure that stops a person exercising a free and independent judgment, even without a threat of violence. The remedy is equitable and discretionary. Delay can bar it. So can a lack of clean hands.

There are two routes. Actual undue influence: the claimant proves the pressure in that case. Presumed undue influence: a relationship of trust and confidence, plus a transaction that calls for explanation. Solicitor and client, doctor and patient, parent and child, and religious adviser and follower (Allcard v Skinner) are the familiar relationships. Husband and wife is not automatic, but a bank that takes a guarantee from a wife for her husband's debts is put on inquiry. Lloyds Bank v Bundy is the case where an elderly farmer charged his home in circumstances his bank could not defend.

The influence can come from a third person. The contracting party who knows, or ought to know, may still lose the bargain. Independent advice is the usual protection, and it must be real advice, not a formality. Inche Noriah v Shaik Allie Bin Omar is the gift set aside where the advice did not free the donor from the influence.