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UK (England and Wales)
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Home > Country profiles > UK (England and Wales) > Articles > Article detail






Economic Duress – How Far Is Too Far?

Wednesday, 20th June 2019

"Introduction

What options are available to a party which finds itself pressured to enter into a contract? 

It might be possible to undo the agreement on the basis that it was reached under duress -  even, in principle, where the pressure consisted of a threat to do something lawful.

However, most, perhaps all, commercial negotiations will be carried out under some degree of pressure, and sometimes overwhelming pressure.  This raises a question for negotiating parties: in pressing home a strong bargaining position, how far is too far?

The answer is that a threat to carry out a lawful act goes too far when it is made 'illegitimately'.  As we reported here, in his 2012 judgment in Progress Bulk Carriers1, Cooke J held that 'illegitimate' in this context means 'morally or socially unacceptable'.

This open-textured test has been clarified and restricted in a recent Court of Appeal judgment2.  Where the threats or acts in question are lawful, the doctrine will only apply when the party in question acts in bad faith.  This appears to set a high bar indeed for parties seeking to rely on lawful acts as grounds for an economic duress case."

Read in full: 


Web-link: http://www.mondaq.com/uk/x/816818/trials+appeals+compensation/Economic+Duress+Ho...
Source: Mayer Brown
Language: English
Contact: Susan Rosser and Tom Wild


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