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Duress
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Different kinds of duress
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Physical
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Economic
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Elements of economic duress
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Illegitimate pressure
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Threat of unlawful act or
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Threat of lawful act
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No reasonable alternative
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Need to protest
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Undue Influence
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Where does the doctrine of undue influence stem from?
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Equity
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Classifications of undue influence
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Actual (class 1)
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Presumed/evidential (class 2)
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Subdivisions of class 2
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Special relationship
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Established on facts
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How to raise presumption of UI from Natwest v Morgan
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Relationship of trust and confidence
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Transaction that calls for explanation
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Misrepresentation cases
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Property was described as “fully let” even though tenants had already been given notice to quit. The court held there was no actionable misrepresentation because there was no duty to disclose such facts during negotiations. |
Dimmock v Hallett (1866)
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Esso gave an expert forecast of petrol sales that induced the lease, but the forecast was negligently maintained despite major planning changes. The court held Esso liable for negligent misrepresentation or breach of collateral warranty because experts owe a duty of reasonable care when making predictive statements. |
Esso Petroleum v Marden (1978)
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Where a material representation is made, it is held that one is induced even if don't carry out own due diligence.
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Redgrave v Hurd (1881)
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A seller’s estimate of land’s sheep-carrying capacity was held to be an honest opinion given the land had never been used for sheep farming. The Privy Council held there was no misrepresentation because the statement was genuinely held and not objectively false. |
Bissett v Wilkinson (1927)
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A seller described a tenant as “most desirable” despite knowing he was in serious arrears. The court held this amounted to misrepresentation because an opinion can imply underlying facts known only to the representor. |
Smith v Land & House Property Corp, (1884)
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A statement of opinion was challenged on the basis that the representor could not reasonably have held it. The court confirmed that an opinion is actionable if it is not genuinely held or if the representor alone knows the true factual position. |
Brown v Raphael, (1958)
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The group participated in promotional events while knowing a member intended to leave. The court held that this conduct implied a representation of group stability, constituting misrepresentation. |
Spice Girls Ltd v Aprilia World Service BV, (2002)
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An investor claimed he was misled, but he had signed a document explicitly acknowledging full understanding of the investment risks. The court held that there was no inducement and applied contractual estoppel, as the non-reliance clause prevented denial of the agreed factual basis. |
Peekay Intermark Ltd v ANZ Banking Group, (2006)
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Requirements for fraudulent misrep and entitlement to damages knowledge of falsity, lack of belief in truth, or recklessness. |
Derry v Peek, (1889)
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Damages are all losses flowing from fraud
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Doyle v Olby
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Silence is not misrepresentation
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Keates v Cadogan
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Misrepresentation by omission or half truth
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With v O'Flanagan
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A bank provided a negligent credit reference that the claimant relied upon, but the reference contained a clear disclaimer. The court recognised liability for negligent misstatements where there is an assumption of responsibility, but held that the disclaimer prevented a duty of care from arising. |
Hedley Byrne v Heller, (1964)
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A car dealer misrepresented the size of a customer’s deposit, inducing a finance agreement. The Court of Appeal held that under s 2(1) Misrepresentation Act 1967, damages are assessed as in deceit, meaning full losses are recoverable even if unforeseeable. |
Royscot Trust Ltd v Rogerson, (1991)
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To work out ostensible authority: -If a principal (the garage) represents that an agent has authority, and -A third party relies on that representation, |
Freeman & Lockyer v Buckhurst Park Properties [1964]
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Mistake cases
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Two ships named Peerless created a fundamental ambiguity because each party referred to a different ship and shipment date. The court held there was no enforceable contract since the objective ambiguity meant no consensus ad idem. |
Raffles v Wichelhaus, (1864)
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A buyer mistakenly believed he was purchasing old oats, but the seller supplied new oats without making any representation. The rule established that mistake does not void a contract unless induced, and parties are bound by the objective test of agreement. |
Smith v Hughes, (1871)
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Parties contracted for corn believed to be in transit, but it had already been sold before the contract. The court held the contract void for mistake because the subject matter no longer existed at the time of agreement. |
Couturier v Hastie, (1856)
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A painting was mistakenly believed to be by Constable, a fact discovered only years later. The court held that common mistake did not void the contract since the subject matter existed, and rescission was barred due to lapse of time. |
Leaf v International Galleries, (1950)
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Parties contracted under the mistaken belief that a ship was nearby when it was not. The Court of Appeal rejected equitable common mistake and held that common law mistake requires impossibility of performance, which was not satisfied. |
Great Peace Shipping Ltd v Tsavliris, (2002)
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An illiterate guarantor signed a document believing it related solely to a farm purchase when it imposed far wider liability. The court accepted the non est factum defence because the document was fundamentally different from what he reasonably believed. |
Lloyds Bank plc v Waterhouse, (1991)
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An elderly claimant was induced to sign a document different from what she intended but failed to take reasonable care. The House of Lords held that non est factum failed because the mistake was not sufficiently radical and the signer was careless. |
Saunders v Anglia Building Society, (1971)
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Reaffirmed that rectification requires proof of an objectively shared intention. |
Chartbrook v Persimmon Homes Ltd, (2009)
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Both parties misunderstood the meaning of “feveroles,” but objectively agreed to contract for “horsebeans.” The court refused rectification because the contract already reflected the objective agreement, and rectification cannot be used to create a different bargain. |
Frederick E. Rose (London) Ltd v William H. Pim Jnr & Co Ltd, (1953)
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Duress
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C agreed to buy D’s company interest but alleged he did so under death threats. The case established that threats need not be the sole cause of consent for duress to vitiate a contract. |
Barton v Armstrong [1976]
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An elderly woman signed a property settlement under the threat of being institutionalised. The court held that coerced consent invalidates the agreement, establishing duress in personal pressure cases. |
Cumming v Ince (1847)
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A threat to withdraw from a share deal induced a guarantee agreement. The Privy Council held that commercial pressure alone is not duress unless the victim’s will is overborne. |
Pao On v Lau Yiu Long [1979]
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C falsely claimed insolvency to force renegotiation of a charterparty. The court recognised economic duress in principle but held that insufficient pressure to deprive free choice does not vitiate consent. |
The Siboen and The Sibotre [1976]
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A debtor exploited a creditor’s financial distress to force acceptance of a reduced payment. The court held the agreement invalid due to economic duress, stressing the need for equitable conduct. |
D & C Builders v Rees [1966]
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A trade union blacklisted a ship unless payment was made to a welfare fund. The House of Lords held that money extracted under illegitimate pressure is recoverable, defining modern economic duress. |
The Universe Sentinel [1983]
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Undue Influence cases
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A husband misled his wife into signing a mortgage that secured his business debts. The court held the transaction voidable because the bank had constructive notice of undue influence and failed to ensure proper safeguards. |
Barclays Bank v O’Brien [1994]
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Several wives challenged guarantees given for their husbands’ debts on grounds of undue influence. The House of Lords clarified when the presumption of undue influence arises and imposed a duty on banks to ensure independent legal advice. |
RBS v Etridge (No 2) [2001]
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A wife claimed undue influence after signing a charge to help her husband, but no special relationship or significant disadvantage was found. The case limited presumed undue influence, confirming it requires a relationship of trust and a transaction calling for explanation. |
National Westminster Bank v Morgan [1985]
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A farmer relied entirely on his bank’s advice when guaranteeing his son’s debts. The court set aside the guarantee, recognising undue influence arising from a trusted relationship abused by the bank. |
Lloyds Bank v Bundy [1975]
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A wife challenged a mortgage based on presumed undue influence and allegations of disadvantage. The court reaffirmed the importance of disadvantage in establishing the presumption, while recognising potential future refinement of the doctrine. |
Barclays Bank plc v Coleman [2000]
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