The Ground Of Economic Duress In The Late 19th Century
ECONOMIC DURESS DURING A PERIOD OF ECONOMIC DOWNTURN
Introduction
Credit crunch good news for the Bar?
The Business Secretary, Lord Mandelson, has expressed concern that banks are suddenly and unilaterally changing the terms of credit facilities with companies making the credit more costly and at the same time charging the companies high administration fees for doing so.
Can some of these arrangements be challenged on the ground of economic duress?
Two requirements must be satisfied for relief to be available on the ground of duress. In Universe Tankships Inc of Monrovia v. International Transport Workers’ Federation [1983] AC 366, 400C, Lord Scarman explained that there are “two elements in the wrong of duress (1) pressure amounting to compulsion of the will of the victim, and (2) the illegitimacy of the pressure exerted.”
I. CAUSATION
A. The test for duress of the person
Barton v. Armstrong [1976] AC 104
It is enough that the pressure “was a reason (not the reason, nor the predominant reason nor the clinching reason) why the complainant acted the way he did.”
The person who applies pressure to extract a promise from another is not allowed to excuse his wrongful behaviour by using other reasons which the victim may have had for making the promise.
Armstrong exerted pressure on …show more content…
The circumstances are likely to be relevant only where they were not foreseen at the time of the contract. Where the supervening circumstances were foreseen at the time of the contract and the risk was assigned to the threatening party then it will not assist that party. This is likely to be the case with fluctuations in prices or currencies. In such a case if the defendant by his threat to breach his contract is simply trying to use the change in circumstances as an excuse to re-allocate risks which had been assigned to him at the time of the contract, such a threat will be regarded as
Introduction
Credit crunch good news for the Bar?
The Business Secretary, Lord Mandelson, has expressed concern that banks are suddenly and unilaterally changing the terms of credit facilities with companies making the credit more costly and at the same time charging the companies high administration fees for doing so.
Can some of these arrangements be challenged on the ground of economic duress?
Two requirements must be satisfied for relief to be available on the ground of duress. In Universe Tankships Inc of Monrovia v. International Transport Workers’ Federation [1983] AC 366, 400C, Lord Scarman explained that there are “two elements in the wrong of duress (1) pressure amounting to compulsion of the will of the victim, and (2) the illegitimacy of the pressure exerted.”
I. CAUSATION
A. The test for duress of the person
Barton v. Armstrong [1976] AC 104
It is enough that the pressure “was a reason (not the reason, nor the predominant reason nor the clinching reason) why the complainant acted the way he did.”
The person who applies pressure to extract a promise from another is not allowed to excuse his wrongful behaviour by using other reasons which the victim may have had for making the promise.
Armstrong exerted pressure on …show more content…
The circumstances are likely to be relevant only where they were not foreseen at the time of the contract. Where the supervening circumstances were foreseen at the time of the contract and the risk was assigned to the threatening party then it will not assist that party. This is likely to be the case with fluctuations in prices or currencies. In such a case if the defendant by his threat to breach his contract is simply trying to use the change in circumstances as an excuse to re-allocate risks which had been assigned to him at the time of the contract, such a threat will be regarded as