10 Duress and undue influence
If a contract is formed correctly, containing all the necessary elements to
make it valid, but is formed under unfair pressure, then it cannot in reality
be a genuine agreement, which is the essence of the law of contract.
Common law has recognised for a long time that a party may have been
coerced, or forcibly persuaded against their will, into making a contract.
The courts deal with this by setting the contract aside under the common
law doctrine of duress and the equitable doctrine of undue influence.
Duress
This doctrine was developed by common law. It was once very narrow and
limited to situations where a contract was induced by unlawful physical
violence to the person, or the threat of it, or the unlawful constraint of the
other party or someone close to the other party. The following are examples
of the operation of the common law doctrine of duress:
Cumming v Ince (1847)
A threat was made to confine an elderly lady to a mental hospital (when it
was not necessary) if she did not make an agreement to transfer property.
The agreement was held to have been made under duress, and was
therefore void. This is an example of threat of unlawful constraint.Kauffman v Gerson (1904)
Threats were made to have Mrs Gerson’s husband prosecuted if she did
not make an agreement to pay of his debts. The agreement was held to
be made under duress.I’ll sign it ...