Duress is the actual violence or threat of violence which induces a person to enter into a contract against his will. Duress renders the contract voidable at the instance of the party who was forced to enter into the contract; Shell Petroleum Development Company of Nigeria vs. Nwawka 2003 FWLR part 144, p 506. The violence or threat of violence must however be to the person of the contracting party and not to his property. In Skeate vs. Beale it was held that a landlord’s threat to sell some goods of his tenant does not amount to duress. This was a narrow interpretation of the common law. Undue influence extends beyond threats to property. In contrast see: Friedeberg-Seeley vs. Klass.
In the law of contract duress may take the form of actual physical or mental threats on the person or the interest of the innocent party or his relation, friend or associate. For duress to vitiate a contract, the threat must be unlawful. For instance, threat with litigation or other form of legal action is not unlawful.
Thus it was stated in Shell Petroleum Development Company of Nigeria vs. Nwawka that for a party to succeed in duress cases, he must plead and establish that:
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He consented to the contract.
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There was violence or threats of violence.
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The nature of such violence or threat.
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He must also prove the fact that the consent was obtained under such pressure and compulsion.
Economic Duress
Duress was originally restricted to the exertion of a threat of physical or mental arm on a person in order to induce him to enter into a contract. However the scope of duress has been widened and now recognises the concept of economic duress. In North Ocean Shipping Co Ltd vs. Hyundai Construction Co Ltd, the defendant forced the plaintiff for whom they were building a ship to pay extras ten percent above the agreed cost by threatening to abandon construction midway. Knowing that the plaintiff had already concluded a lucrative contract to lease the ship to a third party on completion. The court held that the action of the defendant constituted economic duress. This concept has begun to be recognised by the court and various principles have evolved in the concept. In Pan On vs. Lau Yiu Long the court noted that economic duress can be a factor which may make a contract voidable provided that it must always amount to a “coercion of will which vitiates consent.”
In essence the expression ‘coercion of will’ constitutes the test for the establishment of economic duress in contract. Unfortunately, the expression has not been judicially defined yet it has always been regarded as the basis of most decisions pertaining to economic duress. What is important is that for there to be economic duress, the pressure on the party pleading same must go beyond the regular demands. Note that under duress the plaintiff will have to choose in most cases between two extremely unpleasant alternatives. Therefore, economic duress may also be established in exceptional circumstances even though there might not be total coercion or compulsion of the will.Where the only alternative available to the innocent party is to break another contract with a third party or to incur some other form of liability, economic duress may still be established even without compulsion of will.
In B& S the contract was a contract for the exhibition of stand. Less than one week to the opening of the exhibition, the contractor told his clients that he required additional payment to meet certain claims that were being made a against him by workforce. He threatened that the contract would be cancelled if the demand was not met. The client became highly troubled by the likely consequences of not having the stands ready in time. Not only would his reputation be unduly impaired, he would also be subjected to heavy claims for damages by the exhibitors to whom spaces had been let. He was thus compelled to make the additional payment. The court held that the money paid was recoverable as it was paid under duress.
Also in Universe Tankship of Monrovia vs. International Transport Workers Federation. In this case, a trade union threatened to induce the crew of a ship to break their contract of employment and thus prevent the ship from leaving the port. Such threats If carried into effect would place the ship owners into tremendous financial mess. Thus they were compelled to agree to make certain payments to the union. The court was satisfied that the ship owner’s consent was made under economic duress.
Undue Influence
The concept of undue influence is a doctrine of equity which developed because the court of equity felt that the concept of duress is too narrow. Undue influence is based on the fact that the complainant entered into the contract or made a gift of property without free consent in that the other party exerted an influence over him which prevented him from exercising an independent judgement in the matter. In FBN PLC vs. Funso Akinyosoye 2005 5 NWLR pt 918, the court per Ogunbiyi JSC defined undue influence as follows:
“Any improper or wrongful contraints, machinations or urgency of persuasion whereby the will of a person is over powered and he is induced to do or forbear an act which he would not do or would do if left to act freely”.
Undue influence may be actual or presumed .
Actual Undue Influence
Undue influence is actual where consent is obtained by some sort of illegitimate pressure though not amounting to duress or where one party may have exercise such domination over the mind or will of the other. A threat of prosecution for an offence or other forms of blackmail could amount to actual influence. In Williams & anor vs. Bayley where a son gave his bank several promissory notes upon which he had forged his father’s signature. At a meeting to resolve the problem, sequel to the banks threat to prosecute the son from giving forged promissory notes the father agreed in writing to grant an equitable mortgage to the bank. The mortgage was held invalid because there was undue pressure mounted on him by the bank in order to extract the mortgage amount.
Presumed Influence
Where it is established that the the parties have a special relationship wherein one of the parties reposes confidence in the other, proof of actual influence may not be necessary. Most of such relationships are fiduciary in nature. For example:
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Contract involving a solicitor and his clients. See Willis & ors vs. Baron & ors.
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Contract between parent and child. Bainbrigge vs. Browne
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Contracts involving guardian and ward. Archer vs. Hudson
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Doctor and patient relationship. Radcliffe vs. Price.
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Fiance and Fiancée: Re Lloyd’s Bank.
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Religious or spiritual adviser and disciple or follower: Allcard vs. Skinner
In all the above cases or instances, undue influence can be presumed. Note however that undue influence remains presumed until it is rebutted. Once it is shown that the party who reposed confidence in the other has been placed in such a position as will enable him to form an entirely free and unfettered judgement, the presumption may be rebutted. See: Archer vs. Hudson.