Duress, undue influence, and unconscionability - case principles

Barton v Armstrong

even if the victim would have made the same decision regardless, illegitimate pressure that has a causal role in a decision is duress

Pao On v Lau

Commercial pressure does not equate economic duress

The Universe Sentinel

rationale of common law of economic duress = ‘apparent consent was induced by pressure exercised upon him by that party which the law does not recognise as legitimate with the consequence that the consent is treated in law as revocable … unless after the illegitimate pressure has ceased to operate on his mind’

Atlas express v Kafco

commercial pressure can amount to duress where signed under compulsion and unwillingly

Williams v Roffey Bros

the initiative to pay more came from a party other than the claimant so not duress

The Evia Luck

economic pressure may amount to duress provided that it is characterised as illegitimate and constituted a significant cause inducing the plaintiff to enter into the relevant contract

Times Travel v Pakistan Interntional Airlines

ending of an agreement was not reprehensible - especially given that the defendant had a genuine belief and were therefore acting in good faith

Allcard v Skinner

defendants an wrongfully benefit even in the absence of malice

in equity religious dominance over another would not be allowed to receive a benefit

Credit Lyonnais v Burch

where a transaction is excessively onerous, the 3rd party has to take steps beyond Barclays v O’Brien (loan surety) to avoid being fixed with constructive notice

employer/ee relationship is likely to give rise to trust and confidence

Royal Bank of Scotland v Etridge

undue influence threshold

1. relationship of trust and confidence

2. transaction which calls for explanation

Nature Resorts v First Citizens Bank

experienced businessman’s independent understanding may suffice to rebut presumption even where lacking independent legal advice

Waller-Edwards v One Savings Bank

creditor put on inquiry in any non-commercial hybrid transaction where there is more than de minimis element of borrowing which serves to discharge the debts of one of the borrowers

Creswell v Potter

modern equivalent of ‘poor and ignorant person’

Alec Lobb v Total Oil

to be an unconscionable bargain, it is not enough to show that a term is objectively unreasonable

inequality of bargaining power is a relative concept as there is almost always some discrepancy away from being absolutely equal

Hart v O’Connor

the same standards apply in determining the validity of a contract entered into by a person of unsound mind who was ostensibly sane as a contract by a sane person

this is because since the lack of mental capacity was unknown to the defendant, there was nothing unfair about the defendant’s conduct

Boustany v Piggott

when the disadvantage is highlighted to the defendant and they do nothing to make them fair, this is unconscionable because they were content to allow the other party to accept unfair terms

Lloyds Bank v Bundy

establishes the principle of inequality of bargaining power rather than distinct categories.

National Westminster Bank v Morgan

unequal bargains cannot be the basis of an equitable doctrine where the transaction concerns ‘friendship, relationship, charity, ordinary motives’