Law:

Section:

(a) Contract--- ----Economic duress---Lawful act economic duress---Contract entered into following use of lawful pressure or threat by one party in good faith---Whether such contract was voidable on grounds of duress---Circumstances in which a lawful threat or pressure is sufficient to constitute duress. In 2006, Pakistan International Airlines Corporation (PIAC) appointed Times Travel (UK) Limited (TT), a travel agent specialising in flights from the United Kingdom (UK) to Pakistan, as agent to sell tickets on its flights to Pakistan from the UK. At the time, PIAC was the only airline operating direct flights from the UK to Pakistan. A dispute arose between the two parties concerning TTs entitlement to commission on past ticket sales. The appellant-TT asserted that PIAC had failed to make certain commission payments. The PIAC threatened TT by stating it would not enter into a new contract with the travel agent unless it agreed to waive its claim for unpaid commission. The PIAC served notice under the contract to terminate the contract with TT. In the meantime, the parties agreed the terms of a new agency agreement, predicated on the basis that TT would waive its earlier claims to commission. The appellant-TT subsequently issued proceedings for the unpaid commission against PIAC, contending that it was entitled to rescind the new agreement, which included a waiver of the earlier commission claim, on the basis of economic duress. Per Lord Hodge, JSC (Majority view): There are two circumstances in which the English courts had recognised lawful act duress. The first was where a defendant used their knowledge of the claimants criminal activity, or that of a person close to the claimant, to threaten the claimant. Though originally viewed as an example of the equitable doctrine of undue influence, this was now seen as lawful act duress. The second was where the defendant, having exposed himself to a civil claim by the claimant, used reprehensible means to manoeuvre the claimant into a position of vulnerability to force him to waive his claim. In both circumstances, the courts have been influenced by the role of equity. Williams v Bayley (1866) LR 1 HL 200; Kaufman v…

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