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Excusable consent in duress

Published online by Cambridge University Press:  02 January 2018

Alexander F H Loke
Alexander F H Loke*
Affiliation:
City University of Hong Kong, School of Law, Tat Chee Avenue, Kowloon Tong, Hong Kong
*
Email: [email protected]
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Abstract

While the illegitimate pressure theory provides a more satisfactory theoretical basis for duress in contract law than the overborne will theory, it insufficiently addresses why a victim who has given deliberated consent should be excused from contractual responsibility. The paper proposes that the additional element of ‘excusable consent’ enhances the current analytical framework: first, by recognising that the law makes value judgments of both the threatening party's actions and the victim's response; secondly, by lightening the burden of the illegitimate pressure element and providing it greater focus; and, thirdly, by providing a better fit for considerations such as ‘no practical alternatives’ that strain the existing framework.

Type
Research Article
Information
Legal Studies , Volume 37 , Issue 3 , September 2017 , pp. 418 - 436
Copyright
Copyright © Society of Legal Scholars 2017

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Footnotes

*

I am very grateful for the valuable comments of the two anonymous referees and the initial research assistance provided by Nicholas W J Ng, LLB ’18 (NUS). All errors remain my responsibility.

References

1. Universe Tankships v ITWF, ‘The Universe Sentinel’ [1983] 1 AC 366; Dimskal Shipping Co SA v International Transport Workers Federation, ‘The Evia Luck’ [1992] 2 AC 152; R v A-G for England and Wales [2003] UKPC 22; Borelli v Ting [2010] UKPC 21.

2. North Ocean Shipping Co Ltd v Hyundai Construction Co Ltd [1979] QB 705.

3. Dimskal Shipping Co SA v International Transport Workers Federation, ‘The Evia Luck’ [1992] 2 AC 152 at 165, per Lord Goff. E Peel (Treitel's) Law of Contract (London: Sweet & Maxwell, 14th edn, 2015) at [10-006]–[10-010].

4. The Universe Sentinel, above n 1, at 400, per Lord Scarman; J Chitty Chitty on Contracts (London: Sweet & Maxwell, 32nd edn, 2015) vol 1 at [8-008].

5. For a succinct overview of the issues that attend claimant-sided and defendant-sided rationales, see J Morgan Great Debates in Contract Law (Basingstoke: Palgrave Macmillan, 2nd edn, 2015) pp 194–205.

6. The Siboen and the Sibotre [1976] 1 Lloyd's Rep 293 at 336.

7. Pao On v Lau Yiu Long [1980] AC 614 at 636.

8. Ibid.

9. Ibid.

10. DPP v Lynch [1975] AC 653.

11. Ibid, at 695.

12. PS Atiyah ‘Economic duress and the overborne will’ (1982) 98 L Q Rev 197 at 200.

13. PS Atiyah ‘Duress and the overborne will again’ (1983) 99 L Q Rev 353 at 356.

14. Ibid.

15. Ibid.

16. The Universe Sentinel, above n 1, at 384. See also Lord Goff's judgment in The Evia Luck, quoted at n 40.

17. The Universe Sentinel, above n 1, at 400.

18. Borelli v Ting [2010] UKPC 21 at [34].

19. See eg R v A-G for England and Wales [2003] UKPC 22 at [15].

20. Chitty on Contracts analyses duress as a combination of pressure and absence of practical choice: Chitty, above n 4, vol 1 at [8-008]. Cf Peel, above n 3, which analyses economic duress in terms of illegitimate pressure and causation (at [10-006]–[10-010]).

21. Barton v Armstrong [1976] AC 104.

22. In Huyton v Cremer, Mance J went on to suggest that the pressure must have been ‘decisive or clinching’: [1999] 1 Lloyd's Rep 620 at 636.

23. In Singapore, the quality of the consent is a relevant consideration for ascertaining the illegitimacy of the pressure: Wu Yang Construction Group Ltd v Zhejiang Jinyi Group Co Ltd [2006] 4 SLR (R) 451 at [78], per Andrew Phang J (‘pressure that so distorts the voluntariness of the consent that the law regards such pressure as illegitimate’). This conception of how the quality of consent features in the illegitimate pressure theory of duress can be traced to Phang J's article written when he was a university professor. See A Phang ‘Economic duress – uncertainty confirmed’ (1992) 5 J Cont L 147 at 151.

24. DSND Subsea v Petroleum Geo Services ASA [2000] BLR 530 at 545.

25. Pao On v Lau Yiu Long [1980] AC 614 at 635.

26. Lord Scarman in Pao On v Lau Yiu Long, ibid; Griffith LJ in B & S Contracts and Design Ltd v Victor Green Publications Ltd [1984] ICR 419 at 426.

27. Griffith LJ in B & S Contracts and Design Ltd v Victor Green Publications Ltd [1984] ICR 419 at 428; Hobhouse J in The Alev [1989] 1 Lloyd's Rep 138 at 146–147.

28. Lord Scarman in The Universe Sentinel, above n 1, at 400; Kerr LJ in B & S Contracts v Victor Green Publications [1984] ICR 419 at 429 (‘practical choice’).

29. Pao On v Lau Yiu Long [1980] AC 614 at 635; The Universe Sentinel, above n 1, at 400.

30. Above n 24.

31. N Enonchong Duress, Undue Influence and Unconscionable Dealing (London: Sweet & Maxwell, 2nd edn, 2012) at [4-025]. This is a view shared by the editors of Chitty, above n 4, at [8-033] and Peel, above n 3 (‘In assessing whether causation is established, the court will take into account what courses of action (other than submission to the threat) were reasonably available to that person, e.g. whether it would have been reasonable for him to have resisted the threatened wrong by taking legal proceedings’: at [10-008]).

32. Huyton v Cremer [1999] 1 Lloyd's Rep 620 at 638.

33. Enonchong, above n 31, at [4-010].

34. Ibid, at [4-030].

35. B & S Contracts and Design Ltd v Victor Green Publications Ltd [1984] ICR 419; North Ocean; Shipping Co Ltd v Hyundai Construction Co Ltd [1979] QB 705; The Alev [1989] 1 Lloyd's Rep 138; Atlas v Kafco [1989] 1 All ER 41; DSND Subsea v Petroleum Geo-Services ASA [2000] BLR 530; Adam Opel GmbH v Mitras Automotive (UK) Ltd [2007] EWHC 3481.

36. Huyton v Cremer [1999] 1 Lloyd's Rep 620 at 636; Kolmar v Traxpo [2010] 1 Lloyd's Rep 653 at [92].

37. AS Burrows The Law of Restitution (Oxford: Oxford University Press, 3rd edn, 2011) pp 91–95, 270.

38. Barton v Armstrong [1976] AC 104 at 121.

39. Dimskal Shipping Co SA v International Transport Workers Federation, ‘The Evia Luck’ [1992] 2 AC 152.

40. Ibid, at 165, per Lord Goff.

41. See Barton v Armstrong [1976] AC 104, 121 per Lord Wilberforce and Lord Simon.

42. In Australia, the Barton v Armstrong test was applied to economic duress: see Crescendo Management Pty Ltd v Westpac Banking Corp (1988) 19 NSWLR 40 at 46.

43. Huyton v Cremer [1999] 1 Lloyd's Rep 620 at 636.

44. Ibid.

45. The Siboen and the Sibotre, above n 6.

46. Atiyah's criticism was of the logical incoherence of ‘[a] rule which declares that it only operates when a person has no choice but then requires examination of the choices open to him’: Atiyah, above n 12, at 201. He particularly targeted Lord Scarman's dictum in Pao On (p 636) that the duress is confined to cases where the victim ‘had no alternative course open to him’.

47. Huyton v Cremer [1999] 1 Lloyd's Rep 620 at 636; Kolmar v Traxpo [2010] 1 Lloyd's Rep 653 at [92]. See also Chitty, above n 4, at [8-028]; Peel, above n 3, at [10-006]; G Virgo The Principles of the Law of Restitution (Oxford: Oxford University Press, 2nd edn, 2006) p 208.

48. Barton v Armstrong [1976] AC 104 at 118–119.

49. N Seddon ‘Compulsion in commercial dealings’ in PD Finn (ed) Essays on Restitution (North Ryde, NSW: Law Book Company, 1990) p 156.

50. Huyton v Cremer [1999] 1 Lloyd's Rep 620 at 627, per Mance J.

51. Peel, above n 3, at [10-006].

52. Hartog v Colins & Shields [1939] 3 All ER 566.

53. JEB Fasteners Ltd v Mark Bloom & Co [1983] 1 All ER 583, affirming [1981] 3 All ER 289.

54. See text to n 45.

55. Above n 50.

56. This view resonates with theories that advocate keeping a clear distinction between factual causation and the scope of liability to avoid conceptual and legal confusion: see J Stapleton ‘Choosing what we mean by “causation” in the law’ (2008) 73 Miss L Rev 433; RW Wright ‘The NESS account of natural causation: a response to criticisms’ in R Goldberg (ed) Perspectives on Causation (Oxford: Hart Publishing, 2011) p 285.

57. Cf SA Smith ‘Contracting under pressure: a theory of duress’ (1997) 56 Camb L J 343, who argues that either illegitimate pressure or absence of autonomy is sufficient to constitute duress. Unfortunately, the judicial precedents do not support the position that Smith advances.

58. R Bigwood ‘Coercion in contract: the theoretical constructs of duress’ (1996) 46 U Toronto L J 201, which is restated in his Exploitative Contracts (Oxford: Oxford University Press, 2003) ch 7. Bigwood's two-pronged framework draws on A Wertheimer Coercion (Princeton, NJ: Princeton University Press, 1987) ch 2.

59. Bigwood, above n 58, at 252 (emphasis original).

60. Ibid, at 258.

61. The trial judge made a factual finding that the victim ‘must have considered the matter thoroughly in light of the then marketing condition and formed the opinion that the risk in giving the guarantee was more apparent than real’: [1980] AC 614 at 626. From this, the Privy Council concluded that there was ‘commercial pressure, but no coercion’: ibid, at 635.

62. Above n 3.

63. E McKendrick ‘The further travails of duress’ in A Burrows and Lord Rodger of Earlsferry Mapping the Law: Essays in Honour of Peter Birks (Oxford: Oxford University Press, 2006) p 188. Contra P Birks ‘The travails of duress’ [1990] Lloyd's Mar & Com L Q 342 at 346; Burrows, above n 37, pp 274–275.

64. Kolmar v Traxpo [2010] 1 Lloyd's Rep 653 at [92]. This was one among four propositions advanced by counsel, which were accepted by Clarke J as an accurate reflection of the authorities summarised in Lord Goff of Chieveley and G Jones The Law of Restitution (London: Sweet & Maxwell, 7th edn, 2007) at [10-025]–[10-051]; J Chitty Chitty on Contracts (London: Sweet & Maxwell, 30th edn, 2008) at [7-014]–[7-015]; and DSND Subsea Ltd v Petroleum Geo- Services ASA [2000] BLR 530 at [131].

65. Pao On v Lau Yiu Long [1980] AC 614; B & S Contracts and Design Ltd v Victor Green Publications Ltd [1984] ICR 419; Atlas v Kafco [1989] 1 All ER 641; DSND Subsea Ltd v Petroleum Geo-Services ASA [2000] BLR 530.

66. John Carter puts it well when he says, ‘It would throw that area of law into profound confusion if a threat not to perform were to be regarded as illegitimate pressure merely because of an error in assessment of contractual obligation or liability’: JW Carter Contract Law in Australia (Chatswood, NSW: LexisNexis Butterworths, 6th edn, 2013) at [22-20].

67. Cf Williams v Roffey Bros & Nicholls (Contractors) Ltd [1991] 1 QB 1, where there was no suggestion of a threat as the offer to pay more came from the main contractor after he became concerned that the subcontractor would not be able to provide timely delivery according to the contract.

68. B & S Contracts and Design Ltd v Victor Green Publications Ltd [1984] ICR 419 (a contract provider of exhibition stands did not make any overt demands – it was nonetheless clear that unless the defendants made the extra payment, he would walk off the job); North Ocean Shipping v Hyundai Construction, ‘The Atlantic Baron’ [1979] QB 705 (there was no express statement that the ship builder would breach the contract; however, it was clear that unless extra payments were made to make up for the shortfall arising from the foreign currency movements, the owner could not expect the ship to be delivered as contracted).

69. Stilk v Myrick (1809) 2 Camp 217.

70. Williams v Roffey [1991] 1 QB 1.

71. M Chen-Wishart ‘Consideration, practical benefit and the emperor's new clothes’ in J Beatson and D Friedmann (eds) Good Faith and Fault in Contract Law (Oxford: Oxford University Press, 1995) p 146.

72. McKendrick, above n 63, p 188.

73. P Birks An Introduction to the Law of Restitution (Oxford: Clarendon Press, 1989) p 183 (threat ‘intended to exploit the plaintiff's weakness rather than to solve financial or other problems of the defendant’).

74. The Siboen and the Sibotre, above n 6 (mere commercial pressure insufficient to give rise to duress).

75. Atlas v Kafco [1989] 1 All ER 641 at 645, where Tucker J acknowledged that the borderline between economic duress and commercial pressure may ‘in some cases be indistinct’.