untitled

Duress and undue influence 131

was no real consent to the contract can avoid the contract. For example, in The Universe
Sentinel (1982)shipowners were told that if they did not agree to pay money to a seamen’s
charity a trade union would not allow their ship to leave port. The shipowners agreed to
the union’s demands and their ship was allowed to sail away. The House of Lords held that
the shipowners were entitled to recover the money paid to the charity on the grounds
of economic duress. They had not freely agreed to pay this money, they were pushed into
the contract in such a way that they did not really consent. The following case provides
another example.

As the law of economic duress has expanded, some of the old cases on consideration might
now be differently decided. For example, the ship’s captain in StilkvMyrick, which was
considered in Chapter 2, was pushed into the contract against his wishes. If the case were
to arise today a court might hold that there was a contract but that it was voidable for
economic duress.

Undue influence

Over the years a doctrine of undue influence was developed by the courts of equity, which
considered duress to be too narrow a doctrine. In certain relationships undue influence by
the dominant party is presumed. A contract made between people in such a relationship
will therefore be voidable, if undue influence is alleged, unless the party against whom it is
presumed can show that there was in fact no undue influence. The relationships in which
undue influence is presumed are as follows:

(i) doctor and patient;

(ii) solicitor and client;

(iii) parent and child;

(iv) guardian and ward;

(v) trustee and beneficiary; and

(vi) religious adviser and disciple.

Even outside these relationships, undue influence may be presumed where one of the
parties placed great trust and confidence in the other.

Atlas Express Ltd vKafco Ltd (1989)

The defendants, a small company, agreed that the claimants would carry their products

to Woolworths shops throughout the country. The price of carriage was agreed at £1.10

a carton. The first load contained only 200 cartons, not the 500 or so which the claimants

had estimated. The claimants said that they would not carry any of the defendants’ goods

unless they were guaranteed 400 cartons a load. The defendants could not find another

carrier and so they had to agree to this or they would have lost their contract with

Woolworths, which was vital to them. After the cartons had been carried, the defendants

refused to pay the extra amount.

HeldThe defendants did not need to pay. The contract was voidable on the grounds of

economic duress.