Duress to the Person
Where a cause of the contract was the threat of physical violence to the innocent party or another, the contract is void ab initio. There is no need to prove that but for the threat, they would not have entered into the contract: Barton v Armstrong  AC 104.
A contract which is void ab initio is treated as never existing. This means that neither party is entitled to rely on the contract’s terms.
Duress to Property
The historical rule was that a contract is not void if the threat was merely to damage or destroy the claimant’s goods: Skeate v Beale  11 Ad & El 983. There has not been a modern case on the issue. However, it is likely that this is no longer good law since the development of the defence of economic duress. Duress to property therefore probably follows the same rules as economic duress.
Establishing Economic Duress
To establish the defence of economic duress, the innocent party must show that:
- The other party subjected him to illegitimate pressure;
- The innocent party submitted to this pressure because he realised that there was no other practical choice available to him: The Universe Sentinel  1 AC 366; and
- The pressure was a ‘significant cause’ of the innocent party agreeing to the contract: DSND Subsea Ltd v Petroleum Geo Services ASA  BLR 530.
Illegal threats are always illegitimate: R v HM Attorney-General for England and Wales  UKPC 22. Lawful behaviour may also be illegitimate, however, if it was unreasonable and the other party is acting in bad faith: DSND Subsea Ltd v Petroleum Geo Services ASA  BLR 530. For example, threatening to breach a contract to take advantage of the innocent party’s weak position will normally be illegitimate: Kolmar v Traxpo Enterprises  EWHC 113 (Comm).
The innocent party has no practical choice if there are no other reasonable alternatives to him but to submit to the breach: B & S Contracts & Design v Victor Green Publications  ICR 419. Relevant factors include the harm that any alternatives would cause to the innocent party, and anything hampering the innocent party’s perception of or ability to engage with the alternatives which the other party caused or should have foreseen: Huyton v Peter Cremer  1 Lloyd’s Rep 620.
The pressure was a significant cause of the contract if but for the pressure, the innocent party would not have entered into the contract: Huyton v Peter Cremer  1 Lloyd’s Rep 620.
Impact of Economic Duress
Unlike the classic defence of duress, the defence of economic duress makes the contract voidable at the election of the innocent party: IFR Ltd v Federal Trade Spa  EWHC 519.
A contract which is voidable is not treated as never existing. Rather, it is treated as existing until the innocent party communicates that they are terminating the contract or take reasonable steps to do so. Reasonable steps include reporting the goods stolen if the other party has vanished.