Mr. Wong’s claim for the losses he incurred due to the economic pressure made to compel him to agree to deliver at a lower price from the original contract may not be granted by the court. There is no indication, from the facts of the case, that all the necessary elements of economic duress were present. However, Mr. Wong may make a claim for damages not based on economic pressure but the tort of intimidation.
Kerr J clarified the elements of economic duress in The Sibeon and The Sibotre (1976) by stating that the presence of commercial pressure is insufficient in proving economic duress. Evidence should be presented to satisfy the court that the consent of the aggrieved party was overcome by compulsion that deprives the person of freely giving consent to the agreement. Thus, the presence of economic duress is a question of fact that includes the consideration of the following questions: 1) did the aggrieved party protested during the expression or communication of the demand and 2) did the aggrieved party consider the transaction as closed after the demand or did the aggrieved party have the intention of repudiating the new agreement. Lord Scarman in the succeeding case of Pao On v Lau Yiu Long (1980) agreed with the decision in the previous case and reiterated the necessity of the existence of coercion to the will of the aggrieved party that vitiates consent. Factors to consider in determining the presence of coercion are whether the aggrieved party protested, had alternative options, independent advice, or took measures to avoid coercion.
These qualifications were applied in Atlas Express v Kafco (1989) where the court held that the aggrieved party was not bound to the new terms of the agreement because the threat to cancel the contract if the company did not pay a minimum delivery charge even for a lesser quantity of goods constituted coercion since the survival of the company rested upon its ability to deliver the goods on time and it was difficult or even impossible to find a new delivery service at such as short time. The illegitimate pressure caused the company to agree to the new terms but later on refused to pay the new rate.
In the case of economic duress, there are remedies available to the aggrieved party. Lord Scarman in Universe Tankships v ITWF (1982) stated that if duress is proven, the effects is to render the agreement or transaction voidable but this is also actionable as a tort in case it causes damage or loss. To prove the intimidation as covered by tort, Lord Denning in D&C Builders v Rees (1966) and Morgan v Fry (1968) provided the following requirements: 1) presence of threat to use unlawful means such as violence, tort or breach of contract; 2) for the purpose of compelling the other party to comply with the demand; and 3) the person threatened must comply with the demand rather than incur the risk of the threat being carried into execution.
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