Part 3
Vitiating factors
That’s not fair – I was pushed into the agreement!
We have seen from Part 1 of the book that provided that there is offer
and acceptance, consideration, legal intent and capacity, a contract will have
been formed, as these are the strict formation requirements. However, the
very nature of a contract is agreementwhich means that there should be
true exercise of a person’s free will. If someone stands in front of another,
gun in hand, threatening to shoot unless a contract is signed, then that can
hardly be called true agreement! In fact, we would say that the contract is
signed under duress, and it would not be binding. Duress is one of several
factors which could jeopardise an otherwise well-formed contract, and
lead the court to decide that it was not formed in a fair way. In the years
ahead there is likely to be a much greater emphasis on contracts being
formed ‘in good faith’, in light of decisions relating to European law.
So, the following factors will be considered here:
Duress – threats which leave no alternative
Duress is where unfair pressure of the kind mentioned above is used in
forming a contract. It is hopefully not too common to find someone
forming a contract under the threat of a gun, but the doctrine has now
been widened to include economic duress, which is a very relevant
problem in a developed and fast moving economy.
RULES OF FAIR PLAY
No duress
No undue influence
No misrepresentation
No important mistakes
No illegality