The instant case falls under duress and undue influence.

The common law doctrine of duress and the equitable principles on undue influence deal with situations where the consent of a contracting party has been obtained by some form of pressure which is considered by the law as improper. As a result a party who has been coerced into entering into such a contract under duress or undue influence is entitled to rescind the contract Issues 1. Whether Sams outburst and threats to break up the relationship with Marina constitute duress. . Whether Marina signed the guarantee for the loan with !"ym #ank under duress. $. Whether Sams e"ercise of domination o%er the will of Marina constitutes undue influence &. Whether !"ym #ank can sue Marina on the guarantee for the loan Issue 1 The principle is that at 'ommon (aw) a contract which has been obtained by illegitimate forms of pressure or intimidation is %oidable on grounds of duress. Thus duress consist of actual or threatened %iolence to the person) threats of imprisonment or prosecution or threats of %iolence or dishonour to a persons wife) husband or children. *n Kaufman and Gerson,1 the plaintiff had coerced the defendant into signing a contract by threats of criminal prosecution against her husband for an offence the husband had committed in a foreign country. The consideration for the contract was that the plaintiff would not prosecute the husband. The court held that it could not enforce the contract on the grounds that the defendants consent was obtained by duress. +elating this to our case Sam flies into a rage) shouts obscenities and rains insults on Marina and her family when she disagrees with his demand to guarantee the loan from the bank. ,urther Sam threatens to break up the business relationship with her. This amount to actual coercion and a high degree of domination which lends to a loss of independence of Marinas will and consent. ,or the defence of duress to succeed there must be inducement on the part of the plaintiff by the maker of the threat to enter into the contract. (ord Scarman in Pau On v. Lau Yiu Long had noted inter alia -.d/uress) whate%er form it takes) is a coercion of the will and consent so as to %itiate consent. *t is therefore essential that Marina is induced by the threats to enter into the contract. As can be gleaned from a careful study of the case the threats by Sam were a reason why Marina entered into the contract with the bank. 0n that basis Marinas agreement with the bank is %oidable. As has been held by the courts howe%er) it is not a requirement that it be shown that the threat was the only reason for entering into the contract. Thus in Barton v. Armstrong)$ the court held that in the case of duress) as long as the respondents threats were a reason for the appellant e"ecuting the deed) he was entitled to relief e%en if there were other factors which induced him to enter the contract.

.112&/ 3.#. 411 .1152/ A.'. 61&) .1171/ $ W.(.+. &$4 $ .1174/ W.(.+. 12428 .1174/ A(( !.+. &64

Issue 2 *n cases where a party is induced to enter a contract as a result of a threat by the other party to break an earlier contract) this may constitute economic duress and entitle the party threatened to a%oid the contract. *n D & C Bui ders Ltd. v. !ees)& the debtors had taken ad%antage of the creditors financial situation and threatened to refuse to pay at all if the creditor did not accept part payment in full satisfaction of the e"isting debt. The court held that the creditors promise to accept the part payment in full satisfaction of the debt was obtained by duress and the creditor could set the contract aside. 9ere Sam threatened to break up the business relationship with Marina if she did not guarantee the loan. Marina thus agreed because of the threats from Sam. 9er acceptance of the proposition by Sam therefore was obtained under economic duress. 0n that score) she can set the contract aside. Issue " Where it can be shown that one party e"ercised such domination o%er the mind and will of the other party that his consent to a contract cannot be said to ha%e been independently gi%en) the party who was so dominated can rescind the contract on grounds of undue influence. When Sams business runs into difficulties he impresses on Marina to permit him to use the house they owe together as collateral for a loan from the #ank. When Marina refuses Sam threatens to break up the business union with her. #ecause of this and other subsequent threats she agrees to the loan deal with the bank. *t can therefore be said that such domination o%er the will and mind of Marina by Sam made her consent to guaranteeing the loan from the bank. *n any case it can be inferred that probably Marina was gaining from the business union with Sam and she was afraid that if she had not consented albeit threats and domination from Sam she was going to be the loser. A case in support of the assertion is that of #or e$ and Loug%man4 e%en though the principle enunciated there was to the effect that a gift made as a result of undue influence e"pressly e"ercised o%er the donor by the donee may be set aside on grounds of undue influence. *n that case) (oughman) a man of no means and a member of a religious sect was employed as a tra%eling companion to Morley) an epileptic of large fortune. With time (oughman con%erted Morley to his fate and %irtually controlled his life till he died se%en years later. :pon his death) Morleys e"ecutors brought an action to reco%er ;1&2)222 gi%en (oughman as gift by Morley. The court held that (oughman had taken control of the whole life of the deceased and the gifts were not the result of the deceaseds own free will but the effect of that influence and domination. *t can therefore be concluded that Marinas conduct was not as a result of her own free will but was influenced and affected by the domination of her will by Sam. Apart from this e"press use of influence or domination of the other party which the instant case depicts) another situation where the law presumes undue influence is where there is a fiduciary relationship between the parties. *n such circumstances the law presumes undue influence where the parties stand in a relationship of confidence to one
& 4

.1166/ <.#. 6178 .1164/ $ A(( !.+. 5$4 .151$/ 1 'h. 7$4

another which put one party in a position to e"ercise o%er the other an influence which is capable of being abused. Such relationships include parent and child) solicitor and client) trustee and beneficiary) physician and patient et cetera. This presumption can howe%er be rebutted in certain circumstances. Thus where the party who benefited from the other party can show that the other party acted independently of any influence from him and followed independent ad%ice) the presumption is effecti%ely rebutted. ,urther) since undue influence renders a contract %oidable) there can be no rescission for undue influence after the affirmation of the contract or after a third party acquires rights in the sub=ect matter without notice of the facts. Issue & Since a contract is based essentially on the consent of the parties) agreements obtained by coercion or undue e"ertion of pressure are generally not enforceable. Thus the party who has entered into a contract as a result of pressure may be entitled to rescind the contract. !"ym #ank can therefore not sue Marina for the security for repayment of the loan. *n 'emans v Cofie)6 the plaintiff had been illegally incarcerated by the police for 5 weeks in the polices bid to collect a debt allegedly payable by him to someone else. The police had earlier illegally detained his son for & days because they could not locate his father. !%entually the police said they would release Mr. 'ofie if he sold his house to pay off the debt which he agreed in e"change for his release. The police found a buyer) Ms. 9emans but shortly after the sale) Mr. 'ofie brought an action to set the purported sale aside on grounds of duress. The court found for Mr. 'ofie. *n the opinion of the court the entire negotiation and subsequent sale of the house was the handiwork of the police achie%ed through the unlawful arrest of the plaintiff and his son coupled with the naked shoe of unlawful force and pressure e"erted on the plaintiff. The court further added that a transaction procured under such circumstances offends all ci%ili>ed notions of =ustice and fair play and cannot be enforced.7 ,lowing from the abo%e therefore the e"ertion of pressure by Marinas business partner to enter the agreement with the #ank %itiates her consent. The element of coercion of will being glaringly e"ercised by Sam) the #ank cannot sue her on the guarantee for the loan.

.1116?7/ S'@(+ 416 As per Acquah AS'.1116?7/ S'@(+ 625