ABSTRACT
Chapter 19 looks at the legal doctrine of economic duress. Owners are sometimes put in a position where, to obtain timely completion, they are pressured to renegotiate the commercial terms of a construction contract with a non-performing Contractor. Redress may be possible by seeking curial intervention on the grounds of economic duress, to avoid the consequences of having acceded to undue pressure. The chapter considers where is the line between legitimate robust commercial pressure and duress, and when is it crossed? A contract procured by economic duress is not void but may be voidable when one party had no commercial option but to submit. A number of practical issues that arise in the application of the doctrine of economic duress in construction contracts are considered. The importance of comprehensive contemporaneous documents is stressed. The negotiating tactics used in bargaining and what practical choices and alternatives an Owner may have when subjected to illegitimate pressure are considered. An Owner may seek to retrospectively ‘claw back’ the economic penalty it has suffered through arbitration or litigation. Guidance is given on how to avoid crossing the line between robust commercial negotiations and illegitimate pressure for a Contractor seeking to renegotiate contract terms or obtain additional payments as a consequence of delaying events.
