Gatehouse Chambers'
The
In around 2006, PIAC appointed TT as an agent authorised to sell tickets on its flights. By 2012, a dispute had arisen about TT's entitlement to commission. PIAC told TT that, unless it agreed to waive its claim for unpaid commission, it would no longer do business with it. TT succumbed to this threat, and entered into a new agency agreement that included a clause waiving the claim for unpaid commission.
TT in due course issued proceedings for the unpaid commission, claiming rescission of the new agreement (and thus the waiver of the claim for unpaid commission) on the ground that the new agreement was voidable for economic duress.
TT succeeded at trial before Warren J, who held that the contract was voidable for duress notwithstanding that PIAC's threat to TT to stop doing business with it was entirely lawful.
The Court of Appeal overturned Warren J's decision, holding that the so-called doctrine of 'lawful act duress' did not extend to a situation where the defendant uses lawful pressure to achieve a result to which it believes in good faith it is entitled.
The
"[T]he courts have developed the common law doctrine of duress to include lawful act economic duress by drawing on the rules of equity in relation to undue influence and treating as "illegitimate" conduct which, when the law of duress was less developed, had been identified by equity as giving rise to an agreement which it was unconscionable for the party who had conducted himself or herself in that way to seek to enforce. In other words, morally reprehensible behaviour which in equity was judged to render the enforcement of a contract unconscionable in the context of undue influence has been treated by English common law as illegitimate pressure in the context of duress."
In the majority's view, PIAC's conduct (described at [58] as "hard-nosed commercial negotiation") did not cross the line into what equity would have regarded as unconscionable behaviour, and so did not constitute duress at common law.
The majority differed from the
By contrast, in his minority judgment
Whilst the
Co-authored by Prof
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Mr
Gatehouse Chambers
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