Contract Law

Vitiating Factors

Abuse of Power

Economic duress

An important area of abuse of power is economic duress. Economic duress typically arises where one party threatens to breach a contract unless the other party enters a varied or new contract with terms more favourable to the first party. It also can arise where there is very strong economic pressure to enter a contract. Ordinary economic needs frequently lead to contracts being formed, but vitiation does not arise even if such a contract turns out to be unfair...




Undue Influence

A presumption exists that contracts formed in relationships of strong influence were not freely agreed to. This is especially where something of substantial value is transferred. Examples include a personal carer and an intellectually handicapped person, or a professional and a client totally reliant on their expertise.







[1] Universe Tankships of Monrovia v International Transport Workers Federation [1983] 1 AC 366.

Written by Andrew Pingree. All copyright, 2014-2016 vests in Civilaco Pty Ltd.

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