Lawful act duress

Abstract

Legal systems generally accept that contracts may be concluded by way of hard bargaining. This could entail obtaining assent through threats of lawful acts, such as terminating a contract by notice, refusing to enter into a new contract, or instituting legal proceedings. However, in exceptional cases, a threat of a lawful act may be regarded as unlawful or contra bonos mores and give rise to duress. Unfortunately, the South African contract law on identifying these cases is undeveloped. Recent advances in English law may provide guidance on when a threat of a lawful act should be regarded as unlawful. Relevant considerations that could point to such a conclusion include whether the party making the threat created or increased a situation of vulnerability in an unacceptable manner, and what benefits such a party obtained from the threat. It is less clear why it should matter whether a demand was made in bad faith.