Violence or threats of violence

Violence or threats of violence amount to duress. There is a modern example in contract in the case of Barton v Armstrong (1975). In this case, B, the managing director of a company, resented the interference of A, the chairman. A was removed as chairman and B was informed that the company’s principal lender would not advance any more money. B believed that if the money owed to A was settled, further finance would be forthcoming. A threatened to kill B and had made several threatening phone calls. B therefore made an agreement whereby the company would pay A $140,000 and purchase A’s shares in the company. The lender still refused to lend and the company was soon in financial difficulties. Held: the agreements were voidable. Duress need not be the sole reason for entering into them. Once unlawful pressure had been proved, it was up to the other party to show that the threats had had no effect on the decision to contract.