Duress 

Duress is illegitimate pressure that induces a party to enter a contract. It renders the contract voidable, and it is a higher bar than hard bargaining — commercial pressure, even severe, is not enough on its own.

The elements

1. Pressure, which may be applied to the person, to goods, or economically.
2. Illegitimacy — the critical requirement. Pressure is illegitimate where the threat is unlawful, such as a threat of violence, unlawful detention of goods, or a threat to breach a contract. It may also be illegitimate where the threatened act is lawful but the demand it supports is not, though this territory is narrower and less settled.
3. Causation — the pressure must have contributed to the decision to contract. The party need not show they would otherwise have refused; it is enough that the pressure was a reason. Barton v Armstrong [1976] AC 104¹ (Privy Council, on appeal from New South Wales) illustrates the low threshold: a deed signed partly because of threats of violence was voidable for duress even though the signer also had legitimate commercial reasons to sign, because the threats were still a reason for signing.

The three categories

• Duress to the person — threats of violence to the party or those close to them. Rare, and the causation threshold is low.
• Duress to goods — threats to seize, detain or damage property.
• Economic duress — the commercially significant category. Typically a threat to breach an existing contract unless terms are renegotiated, made at a time when the other party has no practical alternative.

Economic duress needs care. Australian courts distinguish illegitimate pressure from the ordinary exercise of commercial power. Relevant considerations include whether a threat to breach was made in good faith, whether the pressured party protested, whether they had a realistic alternative such as an adequate legal remedy, and whether they took steps to avoid the contract promptly afterwards.

Consequences

The contract is voidable and may be rescinded, subject to the usual bars — affirmation, delay, third-party rights and impossibility of restitution. Money paid under duress may be recovered in restitution.

Relationship with the neighbouring doctrines

Duress focuses on illegitimate pressure. Where the complaint is really about the exploitation of a weaker party's disadvantage, unconscionable conduct is the better fit; where it is about the quality of consent within a relationship of trust, undue influence is. These overlap frequently and should be argued in the alternative.

Applying this in a problem question

1. Identify the pressure and its target — person, goods or economic.
2. Address legitimacy squarely; this is where most answers are won or lost.
3. Establish causation.
4. Consider whether the party protested and how promptly they acted afterwards.
5. State the consequence and address the bars to rescission.
6. Plead unconscionability and undue influence in the alternative.

Where the authority sits

Common law, with equity supplying neighbouring doctrines, and a growing overlay of statutory unconscionability in commercial settings.