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Duress and undue influence

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Published date
documents in English
term papers
23 pages
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  1. Introduction
  2. The theory of duress at common law
    1. The scope of duress
    2. Economic duress
    3. Effects and remedies
  3. Undue influence and equity
    1. The scope of undue influence
    2. Actual undue influence
    3. Namely presumed undue influence
  4. Effects and remedies: Influence and equity
    1. A voidable contract
    2. A right to rescind
    3. Bars to rescission
  5. Conclusion
  6. Bibliography

"It is assumed that the parties know their own minds, that they are the best judges of their own needs and circumstances, that they will calculate the risks and future contingencies that are relevant, and that all these enter into the bargain. It follows that unfairness of the bargain ? gross inadequacy or excess of price ? is irrelevant, and that once made, the contract is binding.? This harsh quotation of Atiyah reveals the severity and the power given to contractual agreements by the English law. The English system through its particular tools of creation of the law created two theories softening the rule set by the contractual agreement. Indeed the consent of a contracting party may have been obtained by some form of pressure, which the law regards as improper. The victim of such pressure may be entitled to relief under the common law of duress, and under the equitable rules of undue influence. Treating this issue is a choice that can appear particularly relevant providing the specificity of the concerned concepts and the necessity to point out the differences of the common law and the equity as regards to the French legal system.

[...] The use of this power is illustrated by the case O'Sullivan v Management Agency and Music Ltd[65] where the claimant sought to set aside for undue influence a number of music materials. The defendant argued that rescission should not be allowed as they could no longer be restored to their pre- contract position because of the work which had been done. The claimant argued that rescission for undue influence was not subject to any requirement of restitution at all. Finally, the Court rejected both arguments holding that even tough precise restitution was not possible; rescission could be ordered so long as the Court could do substantial justice. [...]

[...] Besides, the general effect of Etridge might have been to reduce the practical significance of the presumption of Undue Influence and to focus the attention of lawyers on the need for the claimant to prove his case. The greater the disadvantage to the vulnerable person, the more convincing the explanation given by the other before the presumption of undue influence will be rebutted. A recent case has however raised concerns because it changes the way to rebut the presumption as established under Etridge[60]. [...]

[...] On the other hand, changes to the law relating to consideration, particularly in the area of variation of commercial contracts, have increased the need for such a clear and recognized doctrine in English law.[10] In the past, contract changes achieved by means of unfair pressure or extortion could be resisted on the formal ground of absence of the crucial element to the validity of English contracts, the consideration, as applied in Stilk v Myrick in 1809.[11] The typical situation raising the possibility of a claim of economic duress is where one party threatens breach of contract unless the contract is renegotiated, and the other agrees rather than face the disastrous consequences as a result of the breach. [...]

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