The doctrine of duress provides that a party can escape obligations under an agreement where the counterparty applies illegitimate pressure to their person, goods or economically which affects their decision to contract. In respect of duress to the person, as long as there is some degree of causation between the threats and the creation of the contract a finding of duress can be made. It is partly due to this low threshold that legal commentators have suggested illegitimate pressure and lack of consent provide alternative grounds for a finding of duress, thus as long as the pressure brings about the contract it need not affect the quality of consent. The better view, however, is that both are required.
In respect of duress to goods or economic duress (which is threats of an economic nature) the courts have realised that the causative standard must be set higher to avoid excessive mitigation. That said, however, economic duress in particular suffers from the difficulty of defining 'illegitimate pressure' and the possibility of so-called 'lawful act duress' has not been ruled out. The realm of business is fast-paced and rigorous and the idea that a party could escape from a contract because their counterparty threatened to perform an action they were entitled to perform is controversial. It has been suggested in case law that the actor's bona or mala fide will be the determinative factor.
However, the courts use a number of other factors to ensure that parties do not escape their bargains when public policy would make it unjust to do so. In cases of duress, the courts will consider whether the victim had any practical alternatives to entering the contract in question. Similarly, the courts will ask whether the victim protested at the time of the alleged vitiation of consent or whether they subsequently behaved in a fashion which appeared to affirm the bargain.
A party can escape their contract where they suffer undue influence which is actual or presumed. Actual undue influence is similar to duress and 'illegitimate pressure' will usually be 'undue' if the transaction is to the manifest disadvantage of the party. Presumed undue influence is more difficult to classify and consists in one party taking advantage of a position of trust and confidence to the manifest disadvantage of the counterparty - the latter requirement having been otherwise stated as something 'calling for an explanation' or 'not reasonably accounted for by ordinary motives like friendship'. Indeed in some circumstances such as inter alia parent/child, solicitor/client and trustee/beneficiary, the presumption of a relationship of trust and confidence is irrebuttable. In order to be disadvantageous the transaction need not be sinister: "the court does not interfere on the ground that any wrongful act has in fact been committed by the donee but on the ground of public policy".
Where the requisite criteria exist, the burden shifts to the counterparty to show that the contract was entered "after full, free and informed thought", which is chiefly accomplished by demonstrating that legal independent advice was received. A perfectly willing gift can be set aside where the donor's affection for the donee gives them the perception that outside advice is not necessary. Thus, not only is the test for raising the presumption broad but the standard for rebutting it quite exacting.
However, it is not necessarily possible to suggest that the law has gone too far.In the flagship case, Etridge, it was made clear that the husband/wife relationship does not give rise to an irrebuttable presumption of trust and confidence. It is likely that wives will have a harder time proving undue influence against their husbands since using a family home as collateral is not inexplicable according to the ordinary motives between spouses. Moreover, while in theory undue influence is capable of expansive application, in practice commentators suggest it is strongly linked to actual unconscionable behaviour.
