Contracting under Pressure: A Theory of Duress

Abstract

In certain circumstances the fact that an agreement is made under pressure is sufficient reason to invalidate what would otherwise be a good contract. The rules providing for invalidation in such cases are found in the textbooks under the headings of duress and, to a less extent, undue influence and unconscionability. That the existence of pressure sometimes is and should be sufficient to invalidate a contract is not controversial. Few would argue that a contract entered at gunpoint ought to be enforced and the law is clear that such agreements are not enforceable. What is less clear are the principle(s) that underlie such decisions and the proper scope or reach of those principles. These questions are important for both the theory and practice of contract law. Theoretically, because any adequate account of contract law—a doctrine that in the orthodox understanding holds out the ideal of freedom as a core value—must explain that part of the lawin which individual freedom is most directly at issue. Practically, because the recognition in English courts over the last twenty-five years that the defence of duress may be invoked in situations other than threats to a person or even threats to a person's goods (in short, the acceptance of “economic duress”), together with the recent near-elimination of the rule that a promise to perform an existing duty is not good consideration, has meant that courts are regularly required to consider how far the scope of duress should extend.