Economic duress of customer - not lawful
In a recent case a party that had agreed to purchase methanol urgently required for a very important client was forced by the seller to agree to an increase in price and a reduced quantity.
In finding that there had been economic duress which entitled the purchaser to recover the increased payment made, the court confirmed the ingredients of economic duress:
1.?illegitimate economic pressure which has constituted a "but for" cause inducing the claimant to enter into the relevant contract or to make a payment;
2.?a threat to break a contract will generally be regarded as illegitimate, particularly if the defendant must know that the action threatened would be a breach of contract;
3.?it is relevant to consider whether the claimant had a "real choice" or "realistic alternative"; if there was no reasonable alternative, that may be very strong evidence that the victim of the duress was influenced by the threat;
4.?the presence, or absence, of protest, may be relevant when considering whether the threat had coercive effect but even the total absence of protest does not mean that the payment was voluntary.
Case: Kolmar Group AG v Traxpo Enterprises PVT Ltd