DURESS AND UNDUE INFLUENCE AS LAW ON UNCONSCIONABLE
unconscionable contract is unenforceable under the law. This is due to the fact
that such a contract is highly one sided and therefore the result is that one
party in the contract will suffer unfairness. In most cases, this is occasioned
by the substantial bargaining power of the parties where one of the parties to
the contract enjoy excess bargaining power while the other party does not.
are various factors that make a contract between parties become unconscionable.
Such factors are like Duress, undue influence unfair surprise, limiting
warranty and even unequal bargaining power. This therefore means that if there
was any transfer of goods or even money, the aggrieved party may claim the same
back in restitution and on the just basis of unjust enrichment. This is however
subject to certain defenses that may be brought by the other party.
Denning in the case of Lloyds Bank
Limited v Bundy found there to be need to have a general principle to
govern this are of law where he termed the concept as the inequality of the
bargaining power of the parties to the contract.
has also been the case in another decided American of Williams v Walker-Thomas Furniture Company. In this case, the court
termed the issues advanced by the Plaintiff as one of unconscionability. This
is also in line with the findings of the court in the Lloyds Bank Limited case.
the Earl of Chesterfield case, the
court stated that unconscionability may be apparent from the intrinsic nature
and subject of the bargain made. The court further stated that the bargain
should be such as no man in his senses and not under a delusion would make on
one hand and as no honest man would accept on the other, which are unequitable
and unconscientious bargains, and of such even the common law take notice.
occurs when wrongful pressure is exerted on a party to enter the contract. The
pressure should have the threat of immediate harm if the party under duress
fails to comply with the demands of the violating party to enter into the
Duress may also be defined as a threat
of harm made to compel a person to do something against his or her will or
judgment and especially a wrongful threat made by one person especially in the
terms of contract law in order to compel a manifestation of seeming assent by
the other person to the transaction without the actual volition of the victim.
the case of Barton v Armstrong, one
of the party to the contract threatened the other with death if the other party
did not comply and sign the contract. The effect of such duress was that the
privy council set aside the contract on the grounds of duress.
test for duress in the context of rendering a contract unconscionable has
further been reiterated in the case of Universe Tankships Inc. of Monrovia v
International Transport Workers’ Federationwhere Lord Diplock stated that
in finding duress in a contract, focus should not be placed on knowing what one
is contracting for, rather to the fact that the consent by the Plaintiff was
induced by pressure exerted on him by the other party to the contract which is
not legitimate pressure before the law. The pressure must however be revocable
unless approbated either expressly or even by implication.
Defining Undue influence
is where a party who is at a position of trust abuses that position of trust
thereby taking advantage of the inferior party. This means that there must
exist some sort of relationship based on trust between the superior and
court in the Lancashire Loans case
gave the example of a contract between a parent and their child. In such a
relationship, the parent is definitely superior while the child is the inferior
party in the contract. The court further stated that the burden of proof is
therefore on the recipient to show independent advice to the donor.
have also allowed the Plaintiffs to seek a remedy in contract law on other
grounds. In the case of Cresswell v
the court stated that the Plaintiff satisfied the court that she was poor and
ignorant and that alone was enough in the courts view to show that the contract
was biased. This is a similar disposition from the above example of a contract
between a child and their parent.
the above case, the court made reference to the case ofFry v Lane
where the court stated that equity as a remedy in contract law interferes but
in the favor of an expectant heir who is in his youth years or a poor and
marginalized person who has imperfect education. The tests for whether there
was an imbalance in the bargaining power of the parties to the contract were
set put in this case.
is however very important to note that undue influence doesn’t necessarily need
to be direct. In other situations, it may be presumed. This was demonstrated in
the case of Barclays Bank plc v O’BrienIn
this case, the court after examining the fact of the case came to a conclusion
that misrepresentation by Mr. O’Brien didn’t make the bank responsible.
the above case, Mr. O’Brien secured an overdraft using his matrimonial home
when his company was doing badly and he needed financial assistance. The same
was guaranteed by Mrs. O’Brien who signed a document she had not read after a
bank employee made a note stating that Mrs. O’Brien may be a problem when Mr.
O’Brien tried to get an overdraft. Later Mrs. O’Brien claimed that she was
unduly influenced into the contract and that she cannot have been bound by the
contract. The court however rejected this disposition and argument advanced by
Mrs. O’Brien. The judge therefore proceeded to order possession of the home.
Does Duress and Undue Influence form the law on
the case of Cumming v Ince,
an inmate serving at a mental asylum that was privately owned was coerced into
signing away the ownership of her properties to a selected relative under the
promise that if she did sign away title to her properties, the order that committed
her would be lifted. The court found that the contract had not been signed out
of her own will and was therefore unenforceable and was set aside by the court.
The contract was therefore unconscionable.
therefore means that a contract that can be enforced by the law must have been
entered into and signed by both parties out of their own free will.
Consequently, when the consent is coerced, forced or/and suppressed, the
contract automatically and instantly becomes a voidable contract. This cannot
therefore be enforced. This position was also taken by the court in the case of
Barton v Armstrong.
courts are keen to ensure that the coercion, suppression or force are proved.
This was clear in the case of Pao On v
Lau Yiu Long.The
courts will therefore seek to ensure that the person allegedly coerced
protested or whether they did not protest at all. It is also important that the
courts look into whether the coerced party took steps to avoid the contract
after signing and importantly whether or not he obtained independent advice.
courts follow the above tests due to the fact that if a party failed to take
any steps to avoid a contract that they were coerced into then the party is
deemed to have accepted the terms of the contract irrespective of the fact that
there may actually have been duress into entering the contract.Such a party to
a contract will therefore be restricted from changing their mind at a later
stage of the contract execution.
and in the early days, duress was only recognized by the courts when it affects
the person themselves. This was not the case when it concerned property. In the
case of Skeate v Beale
the court declined to set aside the contract. In this case a landlord
threatened a tenant that he will levy duties if the tenant failed to pay the
debt owed. The tenant proceeded to pay part of the amount and further gave a
promise to pay the balance in a period of one month. The tenant was unable to
keep the promise when the period lapsed. The landlord therefore proceeded to
bring a suit against the tenant and the tenant pleaded duress. The court
declined and refused to set aside the contract. The court held the position
that the threat was not to the person but to the goods and therefore the
Defendant cannot sustain the defense of duress.
on the above illustrations and precedent, it is correct to state that duress
and undue influence for the law on unconscionable contracts. The position of
the courts should therefore be that where there is evidence or it can be proved
that one party to the contract is in an influential position, then that party
must bear the burden of proof to prove that the contract was signed absolutely
on a voluntary basis by the weaker party and that there was no element of
duress or undue influence.
the other hand, I totally agree with the positions and decisions the courts
have made before of ensuring the party suffering a suit or an action is also protected.
This is by ensuring that the party claiming duress or undue influence made the
necessary steps to avoid the contract when they first suffered duress or undue
influence and even protested at the initial or latter stages of the contract.
the aggrieved party to the contract is able to demonstrate the above, then it
would be fair and just that they be allowed to fully recover any money paid in
advance in the course of the execution of the contract due to the fact that the
same was payment made without the will of the aggrieved party and in an
environment of economic pressure.
the contrary, another important thing that must be noted is that if a party to
a contract is aggrieved in the course of the exercising a right by the other
party then undue influence and duress cannot be pleaded. This was demonstrated
in the case of Hassanali Issa & Co. v
Jeraj Produce Store.In
the above case, repairs were done by a store owner to a bike. The store owner
thereafter kept the bike waiting for collection of the same by the owner of the
bike. When a bill was issued to the owner, he protested the bill but later
issued a cheque which he again cancelled immediately after the collection of
an action was brought against the bike owner he claimed the cheque was issued
under duress. The court held that there was no duress and that the store owner
was simply exercising lien over the bike pending the payment of his dues. This
case therefore sets it clear that in exercise or a legal right then the aggrieved
party cannot claim/plead duress or undue influence.
Dictionary, [8th Edition, 2004]
List of cases
Bank plc v O’brien  UKHL 6
v Armstrong  AC 104
 1 WLR 255
 11 QB 112
of Chesterfield v Janssen  28 Eng Rep 82, 100
 40 Ch D 312
Issa & Co. v Jeraj Produce Store  EA 555
Loans Ltd V Black  I KB 380 404.
Bank Limited v Bundy  QB 326
On v Lau Yiu Long  AC 614
 11 AD & EL 983
Tankships Inc. of Monrovia v International Transport Workers’ Federation
 2 AII ER 67
v Walker-Thomas Furniture Company  C.A D.C 350 F.2d 445
Lloyds Bank Limited v Bundy
 QB 326
Williams v Walker-Thomas Furniture
C.A D.C 350 F.2d 445
Earl of Chesterfield v Janssen
 28 Eng Rep 82, 100
Black’s Law Dictionary, [8th Edition, 2004]
Barton v Armstrong
 AC 104
Universe Tankships Inc. of Monrovia v
International Transport Workers’ Federation  2 AII ER
Lancashire Loans Ltd V Black
 I KB 380 404.
Cresswell v Potter
 1 WLR 255
Fry v Lane  40 Ch D
Barclays Bank plc vO’brien
 UKHL 6
Cumming v Ince
 11 QB 112
Supra n 5
Pao On v Lau Yiu Long
 AC 614
Skeate v Beale 
11 AD & EL 983
Hassanali Issa & Co. v Jeraj Produce
 EA 555