duress in contracts

Certain requirements are required for a valid and enforceable contract. There are however certain occurrences that render a contract void or voidable. One such occurrence is duress, also known as metus. If the consent (a requirement for a valid contract) is obtained through improper means or improper pressure it often renders the contract voidable. Such improper pressure may include threats, assault, bullying, and cajoling (Smith v Smith 1948).

Such form or forms of metus is/are required to be proven by the party alleging it and to whom the pressure is applied. The general rule in such cases, if proven and successful is to receive restitution, though this is not always clear-cut in practice. Though certain authors have contended that a party who still consents and contracts after the pressure has been removed is regarded to have given his or her fresh consent to the contract, this is not an easy avenue in practice.

Most would agree that a threat of physical harm is a form of duress. However, the question often arises as to economic pressure, which may often be more subtle or harder to determine.

In our law, we recognize “duress of goods” as a threat to do something to someone’s property if they do not pay you or conclude the contract as a form of duress. Logically, a threat to your economic livelihood and wellbeing should constitute an interest worth safeguarding and thus subject to protection from duress.

Given the high frequency of contractual relationships in businesses and negotiations, duress is common. In cases of restraint of trade, the following requirements are to be alleged and proven by the party suffering the pressure:

  • Fear must be reasonable;
  • Must be caused by the threat of considerable veil to him or family;
  • Imminent or inevitable;
  • Must be unlawful or contra bone mores; and
  • Moral pressure must have caused damage

While the above-mentioned highlights economic threats as valid interests worthy of protection, they should be distinguished from the competition and “hard bargaining” which cannot be said to be unlawful given the need for economic and business growth required in any functioning society.

If you require any assistance, do not hesitate to contact us to assist you, given the often-times complexities of the contract and the proof of duress.

 

Faure Swanepoel
faure@bbplaw.attorney
Candidate Attorney

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