''Atlas Express v Kafco (Importers & Distributors) Ltd.''

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QB 833 is an

English contract law English contract law is the body of law that regulates legally binding agreements in England and Wales. With its roots in the lex mercatoria and the activism of the judiciary during the Industrial Revolution, it shares a heritage with countries ...

case relating to

duress Coercion involves compelling a party to act in an involuntary manner through the use of threats, including threats to use force against that party. It involves a set of forceful actions which violate the free will of an individual in order to i ...

Facts

Kafco Ltd. had a contract to supply Woolworths with baskets. They had a ‘trading agreement’ with Atlas Express for at least six months to undertake the deliveries. Atlas Express realised it had underestimated the size of cartons to be carried, so it was costing more to deliver. Kafco would not vary the price. On 18 November 1986,

Law Society Gazette ''The Law Society Gazette'' (also known as the ''Gazette'' or the ''Law Gazette'') is a British weekly legal magazine for solicitors in England and Wales published by the Law Society of England and Wales. While it is available to buy and on su ...

, "Contract: economic distress", published 30 August 1989 Atlas sent an empty truck to Kafco, with a letter saying if a higher charge was not agreed to, the truck would leave empty. Kafco would go broke without the contract, so they "felt compelled to sign". Later, Kafco refused to pay, and argued there was economic duress, and also no new

consideration Consideration is a concept of English law, English common law and is a necessity for simple contracts but not for special contracts (contracts by deed). The concept has been adopted by other common law jurisdictions. It is commonly referred to a ...

.See A Burrows, ''Cases and Materials on Contract'' (2nd edn Hart 2009) 709 Kafco also successfully argued that Atlas had given no consideration for its promise to pay more money on the basis that Atlas was merely performing an existing contractual duty (Stilk v Myrick (1809) 2 Camp 317).

Judgment

Tucker J held there was economic duress in this situation, which meant the contract was voidable. When Kafco's Mr Armiger signed, he did so ‘unwillingly and under compulsion (...) He had no bargaining power. He did not regard it as a genuine arm’s length re-negotiation in which he had a free and equal say and, in my judgement, that view was fully justified.’ Tucker J distinguished economic duress from ‘commercial pressure, which on any view is not sufficient to vitiate consent. The borderline between the two may in some cases be indistinct.’

Notes

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References

*A Burrows, ''Cases and Materials on Contract'' (2nd edn Hart 2009) *P Birks, ‘The Travails of Duress’

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LMCLQ 342 English unconscionability case law English duress case law 1989 in United Kingdom case law High Court of Justice cases

Facts

Judgment

See also

Notes

References