This article is written by Varchaswa Dubey from JECRC University, Jaipur. This article is an exhaustive work regarding the doctrine of duress and how one would go about setting aside a contract using duress.
Table of Contents
Introduction
It is a well-settled rule of Contract Law and the rule of the land that any permission, consent, etc cannot be obtained by putting a person under any type of force, coercion, etc. The term duress is concerned with forcing a person to do something, against his/her will and such consent makes the contract merely voidable.
The term duress is not defined under the Indian Contract Act, 1872 but is one of the wide interpretations and understandings of the concept of coercion under Section 15 of the Act. Duress is often considered a synonym of coercion however that is not the case.
What is duress – scope, meaning, and concept
According to the Black’s Law Dictionary, the term duress refers to the “unlawful constraint exercised upon a man whereby he is forced to do some act that he otherwise would not have done. It may be either “duress of imprisonment,” where the person is deprived of his liberty, and he is forced to comply with the contract, or by violence, beating, or other actual injuries, or duress per minas, including threats of imprisonment or any physical injury or death.”
The defence of duress can only be pleaded when the alleged victim was under imminent danger of his own life or by any other known person.
Origins of the doctrine of duress
Under common law, duress was initially referred to as an actual threat of violence to an individual. In the early 15th Century B.C., duress referred to an actual or apprehended physical constraint so great as to amount to coercion. Under the English Common Law, the doctrine of duress was only pleaded in cases where a contract was influenced by extreme wicked threats including illegal incarceration which compelled the victim to surrender to the dominant party under fear of loss of life or loss of life of any family member, or of mayhem, etc.
Later, the doctrine of duress was believed to extend to threats concerning physical violence however, such threats must be real and mere threats that may not coerce an ordinary man were not enough.
The only rule which has ever been constant and associated with duress is the factor that it consists of putting a person under an imminent threat to gain his/her consent for a contract and that such contract will be voidable at the end of the party whose consent was not gained wilfully.
Types of duress
Duress which coerces the consent of any contracting party to a contract makes the contract voidable. Such duress is either a physical duress or economic duress.
Physical duress
Any duress which causes a physical threat to the aggrieved party to the contract falls within the ambit of physical duress. Such duress gives birth to the threat of physical harm including death and grave injury.
In the case of Barton v. Armstrong and Others (1973), the plaintiff alleged that the defendant will kill the plaintiff if he doesn’t execute a particular deed. The Privy Council, in this case, ruled in favour of the plaintiff and held that the concerned contract is void.
Economic duress
Economic duress refers to the coercion caused by putting the aggrieved party under the fear of causing an economic loss. It is an illegitimate fear, caused by the defendant party by initiating fear of terminating the already existing contract which may cause monetary loss to the other party.
In the case of Pao On v. Lau Yiu Long (1979), the plaintiff agreed to sell his shares and to protect the share value, the plaintiff and defendant agreed to retain 60% of share value, but the defendant later refused to sell his shares. The Privy Council in this case allowed the appeal and held that lower courts did not consider the coercion to amount to duress (commercial pressure).
Economic duress also refers to lawful but unethical behaviour, when one party to the contract refuses to pay as set by the terms of the contract could be economic duress.
Duress of goods
The duress of goods generally refers to the pressure relating to goods, and such pressure is usually to destroy or not to deliver the pending goods. Under the duress of goods, consent may be gained by putting a person under fear of non delivery of goods.
Essentials of duress
The doctrine of duress consists of several factors as laid down in the case of Regina v. Hasan (2005):
- The threat must be to cause death or serious injury.
- The threat must be against the person whose consent has been gained or any person in his/her family or a person close to such person.
- The threat cannot be pleaded as a defence in the cases of murder and treason.
- The tests relating to duress must be objective and regarding the reasonableness of the defendant’s perceptions and conduct.
- The defence of duress only extends to the point where the threats caused were direct and only such threats can be relied upon.
- Where the person whose consent has been obtained by duress had no option to avoid such duress.
- The defendant must not voluntarily have laid himself or herself open to the duress relied upon.
Remedies for duress
Under the established contract jurisprudence, there are no such remedies available for duress except for rescission. The term rescission refers to the setting aside of the whole contract on the grounds of some bad conduct of a party to a contract. The result of rescission is reversing the contract, and putting the parties in the position where they were before the commencement of the contract, and such contract is treated as ‘non-existing’.
Duress under English Law
Duress under common law is also a defence, which is pleaded by those individuals who commit crimes as a consequence of them being forced or compelled to do so under particular circumstances or any illegal threats to others. The doctrine has its jurisdiction not only over the criminal law but also extends to civil law, contract law.
The methods of such illegal pressure are different from other common pressures which are associated with any competitive society. Under English Law, duress is referred to some unlawful pressure in the absence of any alternative available to the victim which leads to a party giving its consent to enter into a contract.
Duress as a defence
It has been observed that duress is also a defence in the court of law, such grounds of defence are:
- The person whose consent was gained by putting him/her under duress must have no other alternative to escape from the coercive situation, only in this case he/she can plead such defence.
- The aggrieved person was threatened with life or grievous hurt.
- The threat must be illegal, and must be imminent.
- The aggrieved person (whose consent has been gained by duress) shall not have placed himself/herself in a situation which was foreseeable to be duress.
- The defence of duress cannot be pleaded in cases of murder, or treason, or attempt to murder.
- The threat made must be specific and the aggrieved person must have been performing as per the threats.
In all the above-mentioned cases, duress can be pleaded as a defence in the court of law. It is significant to underscore that the burden of proof in cases of duress lies on the person who is accused of making such threats and not the person whose consent was obtained by duress.
Coercion
Defined under Section 15 of the Indian Contracts Act, 1872, coercion refers to an unlawful detaining or threatening to detain, any property, to the prejudice of any person. The term coercion is very similar to duress however the doctrine of coercion is wider and also includes the doctrine of duress.
Coercion, in other words, refers to forcing an individual to enter into a contract, and such force usually includes pressuring the concerned party to enter into a contract under threat and to gain the consent of such party. However, such consent is not free and holds no value in the eyes of law if the party’s consent is gained by any factor which causes coercion.
Difference between duress and coercion
Most people consider duress and coercion as synonyms however a thin line exists between both the doctrines which separate them.
- While duress is exercised concerning the life threats to an individual or his/her family or close relatives, coercion can be exercised against any person.
- Duress causes an imminent threat to an individual while coercion does not cover the ambits of imminent threat.
- Unlawful detention is not considered duress under English law while detention of goods is considered a kind of coercion.
The need to set aside a contract based on duress
To set aside a contract based on duress and to eliminate the risk of other parties to a contract who may claim amendments in the contract which was initially agreed by mutual consent and without any coercion, the court must analyze the whole contract and all the facts relating to the case and must ensure that either party to the contract does not cause misrepresentation and must present their request in neutral conditions.
Setting aside a contract based on duress may not cause many issues due to the wide range of factors already present in modern-day contract laws. If duress is eliminated from the books, the contract law still contains the provisions of fraud, misrepresentation, coercion and undue influence.
The contemporary Indian contract law does not have much interpretation concerning duress and therefore the term can be eliminated and when any party alleges that any type of factor has affected the initial contract or the consent of such party was gained by any unlawful means, the court may restore the whole contract to its basics and shall ask to relook the terms of the contract.
The need to set aside a contract which is based on duress is because the consent of one or more parties to a contract is not gained voluntarily, and it is a common concept under contract law that all the parties to a contract shall form a contract voluntarily and no party to a contract shall be forced into a contract.
A contract may be set aside on the grounds of a threat where the threat caused extreme coerciveness which resulted in an unfair transaction however, in certain cases the defence has been criticised on the grounds of being unrealistic and arbitrary.
The theory of duress may be invoked even in the absence of any existing theory merely on the grounds that a party was forced to come into the contract with another party. It is hoped that courts will set aside a contract based on duress when a party was forced into a contract due to any fear, and that courts will continue to protect the interest of the parties in contract law.
To protect the interests of the parties to a contract, the courts must continue to consider the doctrine of duress, therefore providing justice to the victim and safeguarding the contract law.
Possible consequences otherwise
The advantages of having the doctrine of duress include regulating any type of pressure applied by one party to a contract on the other party with a special emphasis on life threats to the party or the family members of such parties. Duress also consists of flexibility which is not usually available in other doctrines of contract law and therefore saves time and effort for both parties.
The defence of duress is based on the concept that a party to a contract was forced by any means to come in a contract with the other party and therefore such contract shall not be enforced in the court of law however, if the defense of duress is not considered by the courts, then it will be easy for dominant parties to force the other parties to a contract, and eventually violates the right to consent of such party.
Conclusion
The doctrine of duress is not based on the absence of consent of a party to the contract but emphasizes how the plaintiff’s consent was gained by putting him/her under pressure. Duress is consent which is not out of the will of a person but the fear an individual possesses due to threats of actions made by the other dominant party to the contract.
Duress is not only a defence in criminal law but also is a remedy for a party whose consent has been derived by putting that party under imminent fear of life or grave injury to the party itself or any other person such party may be interested in.
References
- https://saylordotorg.github.io/text_law-of-commercial-transactions/s13-01-duress-and-undue-influence.html
- Monaghan, C. (2015) Beginning Business Law. 1st edn. Taylor and Francis. Available at: https://www.perlego.com/book/1558846/beginning-business-law-pdf
- https://lawjournal.mcgill.ca/wp-content/uploads/pdf/3208479-sutton.pdf
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