Modern Law Review - 2022 - Pilkington - The Possibility of Lawful Act Economic Duress Pakistan International Airlines

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Modern Law Review
DOI: 10.1111/1468-2230.12740
The Possibility of Lawful Act Economic

Duress: Pakistan International Airlines Corp v Times Travel
(UK) Ltd
Timothy Pilkington∗ and David Winterton†
The voidability of a contract procured by ‘economic duress’ is now well-established, but the
precise boundaries of the doctrine remain contested.In Pakistan International Airlines Corp v Times
Travel (UK) Ltd [2021] UKSC 40, the Supreme Court confronted the longstanding controversy
as to whether a threat to perform a lawful act can provide grounds for a threatened party to
avoid a contract for economic duress. This note argues that the Court’s decision to affirm the
existence of ‘lawful act duress’ is welcome. It is further argued that the specific kind of lawful act
duress identified by the majority and relevant to determining the appeal, described as ‘deliberate
maneuvering via illegitimate means’,provides helpful (and defensible) clarification of the content
of this doctrine, and that the Court was correct to hold that the contract in Times Travel was not
voidable on this basis.
INTRODUCTION
It is now well established that ‘economic duress’ is one of the grounds upon
which a contract may be voidable. Economic duress involves illegitimate pres-
sure imposed via a threat by one party to another that is a ‘significant cause’ of
the threatened party complying with the accompanying demand and, assessed
against a relevant baseline, would cause economic harm to the threatened party
if the threat is carried out.1 One of the most contentious issues regarding eco-
nomic duress has been whether and, if so, when, a threat to perform a lawful
act may entitle the threatened party to avoid a contract.
In Pakistan International Airlines Corp v Times Travel (UK) Ltd2 (Times Travel),
the Supreme Court unanimously held that a contract may be voidable for ‘law-
ful act duress’ but divided as to the test applicable to the form of lawful act duress
relevant to the case and the doctrine’s juridical basis. For Lord Hodge DPSC
(with whom Lord Reed PSC, Lord Lloyd-Jones, and Lord Kitchin JJSC agreed),
∗
D.Phil candidate, St John’s College, University of Oxford.
†
Senior Lecturer, University of Sydney Law School. We thank Michael Dimarco, Jordan English, Alex
Georgiou, Lex McDonald, Scott Ralston and Charlie Ward for comments.
1 See for example Dimskal Shipping Co SA v International Transport Workers’ Federation (The Evia
Luck) (No 2) [1992] 2 AC 152, 165 per Lord Goff; Borrelli v Ting [2010] UKPC 21; [2010] Bus
LR 1718 at [35] per Lord Saville. Whether the claimant must establish that the threat was a
‘significant cause’ of performance of the demanded act and that the claimant had no ‘practical
alternative’ other than to comply is controversial.
2 [2021] UKSC 40.
© 2022 The Authors. The Modern Law Review published by John Wiley & Sons Ltd on behalf of Modern Law Review Limited.
(2023) 86(1) MLR 238–248
This is an open access article under the terms of the Creative Commons Attribution License,which permits use,distribution and reproduction
in any medium, provided the original work is properly cited.
Timothy Pilkington and David Winterton
the defining feature of lawful act duress was ‘morally reprehensible behaviour’
rendering contractual enforcement ‘unconscionable’.3 His Lordship further
held that a contract whereby a threatened party waives a civil claim against
the threatening party may be voidable for lawful act duress where the threat-
ening party deliberately manoeuvres the threatened party into a position of
vulnerability or increased vulnerability to its demand to enter this contract
via ‘illegitimate’ conduct, but held this had not occurred in the present case.
Lord Burrows JSC, by contrast, eschewed unconscionability as a unifying legal
standard for assessment of the existence of lawful act duress and regarded one
scenario where this form of duress may be established, relevant to the appeal,
as being where there is ‘deliberate manoeuvering’ and a ‘bad faith’ demand for
waiver of a claim by the threatening party. His Lordship nevertheless agreed that
lawful act duress was not made out on the facts.
Examining the decision is important because courts in other common law
jurisdictions must decide whether to follow the Supreme Court.4 It is argued
that the Supreme Court’s decision to affirm the existence of lawful act duress,
and the majority’s rationalisation of the doctrine, at a general level, in terms
of ‘unconscionability’, are both welcome. Additionally, it is claimed that the
specific kind of duress identified by the majority and relevant to determina-
tion of the appeal, described as ‘deliberate maneuvering via illegitimate means’
resulting in formation of a contract waiving a civil claim, provides helpful clar-
ification of the content of the doctrine, and that the Court was correct to hold
the contract in Times Travel was not voidable on this basis.
THE FACTS
Times Travel (UK) Ltd (Times Travel), a family-owned travel sales agency,
entered into an enforceable contract (the Original Agreement) with Pakistan
International Airlines Corp (PIAC). Under that contract, Times Travel was en-
titled to a commission on PIAC tickets that it sold (Basic Commission) and
to an overriding commission (Overriding Commission) for total PIAC ticket
sales. Times Travel’s business was almost exclusively reliant upon its ability to
sell PIAC tickets under the Original Agreement.5 Not long after formation of
the Original Agreement, the parties fell into dispute regarding the Basic Com-
mission and Overriding Commission payable by PIAC.
On 14 September 2012, PIAC sent a valid notice of termination to Times
Travel, terminating the Original Agreement with effect from 31 October 2012.
This short notice period gave Times Travel insufficient time to adjust its re-
liance upon PIAC for its business.6 The notice contained an offer by PIAC to
3 ibid at [2], [19]-[25], [30].

4 Neither the High Court of Australia nor the Supreme Court of Canada has definitively de-
termined whether those jurisdictions recognise lawful act duress as a ground for rescission of a
contract.
5 Times Travel (UK) Ltd v Pakistan International Airlines Corp [2017] EWHC 1367 (Ch) (Times Travel
trial) at [50].
6 ibid at [262(iii)].
(2023) 86(1) MLR 238–248 239
The Possibility of Lawful Act Economic Duress
re-appoint Times Travel as one of its sales agents on terms outlined in a

document attached to the termination notice (the New Offer).Under the terms
of the New Offer, Times Travel was to ‘release and discharge’ PIAC from any
existing rights to unpaid commission or remuneration against PIAC. At trial,
Warren J found that this notice of termination constituted a threat by PIAC to
end the parties’ relationship unless Times Travel accepted the New Offer.7 War-
ren J nevertheless held that PIAC genuinely, albeit incorrectly, believed that it
had not failed to pay Times Travel any Basic Commission or Overriding Com-
mission due under the Original Agreement.8
On 17 September 2012, PIAC lawfully reduced Times Travel’s ticket allo-
cation under the Original Agreement and refused to allow Times Travel to
acquire for cash its previous ticket allocations. This reduction caused ‘immense
stress’ to Times Travel and would have put it out of business had it continued
for much longer.9 The parties met on 24 September 2012 and Times Travel was
presented with a document containing the agreement proposed in the New Of-
fer, already signed on PIAC’s behalf. During the meeting, PIAC re-iterated that
Times Travel’s failure to accept the New Offer would result in Times Travel’s
relationship with PIAC ending, such that it would no longer be able to sell
PIAC tickets. Times Travel accepted the New Offer, forming a new contract
(the New Agreement).
In addition to other claims, Times Travel subsequently brought an action for
the agreed sum against PIAC for payment of Basic Commission and Overriding
Commission under the Original Agreement, arguing that the New Agreement
was voidable for economic duress.10 The value of the claim for Basic Com-
mission was £1.215 million excluding interest, and approximately £250,000-
£300,000 for Overriding Commission. Warren J held that Times Travel could
avoid the New Agreement and recover the Basic Commission claimed,11 but
rejected Times Travel’s claim for Overriding Commission. The Court of Ap-
peal overturned the former of these holdings on the basis that Warren J had
not found that PIAC’s demand that Times Travel accept the New Offer was
made in ‘bad faith’.12 An appeal against this decision to the Supreme Court was
unanimously dismissed.
THE JUDGMENTS
Lord Hodge DPSC
The leading judgment in the Supreme Court was delivered by Lord Hodge,
who commenced by accepting that the authorities reveal that a contract may
7 ibid at [260].
8 ibid.
9 Times Travel n 2 above at [59]-[60].
10 Times Travel also unsuccessfully challenged the New Agreement on the basis that it was (al-
legedly) procured by misrepresentation and infringed the Unfair Contracts Terms Act 1977.
11 Times Travel trial n 5 above at [264].
12 Times Travel (UK) Ltd v Pakistan International Airlines Corp [2019] EWCA Civ 828; [2020] Ch 98
at [105], [109]-[115].
240 (2023) 86(1) MLR 238–248
be voidable for lawful act duress in two specific circumstances.13 The first is
where the threatening party uses ‘knowledge of criminal activity by the …
[threatened party or a close family member] to obtain a personal benefit …
[from the threatened party] by the express or implicit threat to report the crime
or initiate a prosecution’.14 Relying upon three earlier (Chancery) decisions
where ‘actual undue influence’ was established,15 his Lordship explained that
the common law doctrine of economic duress has developed to include threats
to perform lawful acts by drawing upon the equitable doctrine of ‘actual undue
influence’, and treating as illegitimate conduct that Equity has regarded as suffi-
ciently ‘morally reprehensible’ to render enforcement of a contract so procured
‘unconscionable’.16
Of greater relevance to the present appeal was the second circumstance
where lawful act duress has been recognised, which Lord Hodge explained was
illustrated by two more recent decisions: Borrelli v Ting17 (Borrelli) and The Cenk
Kaptanoglu18 (The Cenk K). For Lord Hodge, the effect of these decisions is to
establish that a contract may be voidable where the threatening party, having
exposed itself to a civil claim, deliberately manoeuvres the threatened party into
a position of vulnerability or increased vulnerability to a demand to waive its
claim via ‘morally reprehensible’ conduct that would render enforcement of a
contract ‘unconscionable’.19 In our view, understood as cases involving illegit-
imate manoeuvering, Borelli and The Cenk K suggest that the means by which
a threatened party is manoeuvered into a position of vulnerability, or increased
vulnerability, will generally be ‘morally reprehensible’ – and, therefore, ‘illegit-
imate’ – where such manoeuvering results substantially from conduct that is
dishonest or unlawful.
The principal difficulty identified by Lord Hodge with an alternative ap-
proach to lawful act duress focused upon bad faith demands, favoured by the
Court of Appeal and partially endorsed by Lord Burrows, was the absence in
English law of any general doctrine of good faith in contracting. Such an ap-
proach was accordingly not anchored to any recognised principle,20 and there-
fore likely to generate uncertainty.21 Lord Hodge also considered that extension
of lawful act duress to situations where a demand is made in bad faith might
be of limited utility given the evidentiary difficulties involved in establishing
bad faith.22 Finally, his Lordship was of the view that there was no previous
decision where economic duress was established by reference to the existence
of a bad faith demand, and that such an approach would result in an overly
13 Times Travel n 2 above at [4]. Lord Hodge left open the possibility that lawful act duress may
exist in other scenarios but suggested that extension of the doctrine should be approached with
caution: ibid at [3].
14 ibid.
15 Williams v Bayley (1866) LR 1 HL 200; Kaufman v Gerson [1904] 1 KB 591; and Mutual Finance
Ltd v John Wetton and Sons Ltd [1937] 2 KB 389.
16 Times Travel n 2 above at [2], [5]-[9], [19]-[25].
17 n 1 above.
18 [2012] EWHC 273 (Comm); [2012] 1 Lloyd’s Rep 501.
19 Times Travel n 2 above at [4].
20 ibid at [49].
21 ibid at [49].
22 ibid at [51].
(2023) 86(1) MLR 238–248 241
broad doctrine of lawful act duress.23 Lord Hodge nevertheless accepted that
bad faith was of some relevance to lawful act duress;24 being material to both
‘the content of the demand’ and ‘the context’ in which the demand is made.25
Ultimately, Lord Hodge concluded that PIAC had not illegitimately pres-
sured Times Travel into accepting the New Agreement, with the consequence
that Times Travel could not recover PIAC’s unpaid Basic Commission under
the Original Agreement. According to Lord Hodge, although PIAC had taken
advantage of its position as a situational monopolist by lawfully cutting its ticket
allocations to, and threatening to end its relationship with, Times Travel, PIAC
had not manoeuvered Times Travel into a position of increased vulnerability
to its demand to enter the New Agreement via reprehensible conduct of the
kind that ‘gave rise to the findings of lawful act economic duress in Borrelli and
The Cenk K.’26
Lord Burrows JSC
Following a comprehensive review of the authorities and academic commen-

tary, Lord Burrows identified the following propositions as broadly summaris-
ing the law regarding economic duress. First, lawful act duress was a ground
for rescission because: (1) although the leading House of Lords’ decisions on
economic duress concerned threats to act unlawfully, their Lordships chose to
express the relevant questions in terms of whether the pressure was ‘illegiti-
mate’ rather than ‘unlawful’;27 (2) the crime of blackmail ‘includes threats of
lawful action’;28 and (3) there are cases where it has been accepted that threats
of lawful action had entitled the threatened party to a remedy.29 Secondly, to
establish economic duress it is necessary to demonstrate: an illegitimate threat;
sufficient causation; and the lack of any reasonable alternative to the threatened
party other than to comply with the demand. Finally, where the threat is lawful,
‘the illegitimacy of the threat is determined by focusing on the justification [or
lack thereof] of the demand’.30
Additionally, also relying upon Borelli and The Cenk K, Lord Burrows held
that a demand to waive a civil claim is unjustified, and the lawful threat sup-
porting it is illegitimate, where ‘the threatening party has deliberately created,
or increased, the threatened party’s vulnerability to the demand’ and the demand
is made in bad faith in the sense that ‘the threatening party does not genuinely
believe that it has any defence (and there is no defence) to the claim being
waived’.31 Hence, unlike the majority, Lord Burrows considered it unnecessary
to establish that the means by which the threatened party was manoeuvered into
23 ibidat [54], [56]-[57].

24 ibid at [56].
25 ibid.
26 ibid at [58].
27 ibid at [87].
28 ibid at [88].
29 ibidat [89].
30 ibid at [136(iii)].
31 See ibid at [136(v)] and ibid at [104]-[112].
242 (2023) 86(1) MLR 238–248
a position of vulnerability (or increased vulnerability) to the demand to waive

the claim were ‘morally reprehensible’. Also, unlike the majority, Lord Bur-
rows regarded it as necessary that the demand for the waiver by the threatening
party was made in bad faith.32 Applying this analysis to the present appeal, his
Lordship held that the New Agreement could not be avoided because although
PIAC deliberately manoeuvered Times Travel into a position of increased vul-
nerability, there was no finding that the threatened lawful act was coupled with
a bad faith demand.
SHOULD A CONTRACT EVER BE VOIDABLE FOR LAWFUL ACT

DURESS?
The Supreme Court’s decision to affirm that a contract may be voidable for
lawful act duress is welcome. To draw the line between legitimate and illegit-
imate pressure when determining whether a contract should be voidable for
economic duress by reference to whether the threat was to commit an unlaw-
ful act would be unprincipled because it misidentifies the reason why a con-
tract procured by certain forms of pressure should not be enforced. Expressed
abstractly, this reason is that, due to the nature of the pressure imposed, enforce-
ment of the contract is, for reasons elaborated below, not justified, which might
alternatively be expressed in terms of whether it is appropriate for legal respon-
sibility to be attributed to the threatened party for accession to the relevant
demand.33 Whether the threatened action is lawful is certainly relevant to this
inquiry and, where the threatened action is unlawful, often decisive. However,
both the authorities and a proper understanding of what makes enforcing a con-
tract procured by duress problematic indicate that it is more fundamentally the
relationship between this threat and the accompanying demand, including the
circumstances in which the demand is made, that determines the legitimacy of
the pressure exerted.34
To explain further, the overriding concern in contractual cases raising the
issue of duress is not the lawfulness or unlawfulness of the relevant threatened
action, but whether the state is justified in enforcing (against the threatened
party) a contract that is relevantly causally connected to the threat. It is really
this question to which an inquiry into the ‘legitimacy’ of the pressure exerted is
directed. While threats to perform unlawful acts generally render any pressure
thereby exerted ‘illegitimate’,35 there is no necessary connection between the
(un)lawfulness of the action threatened and the (il)legitimacy of the pressure
32 ibid at [112].
33 See for example Universe Tankships Inc of Monrovia v International Transport Workers Federation (The
Universe Sentinel) [1983] 1 AC 366, 384 per Lord Diplock; Crescendo Management Pty Ltd v Westpac
Banking Corpn (1988) 19 NSWLR 40, 45-46; The Evia Luck (No 2) [1992] 2 AC 152, 166 per Lord
Goff. See also H.L.A. Hart, ‘The Ascription of Responsibility and Rights’ (1949) 49 Proceedings
of the Aristotelian Society 171.
34 See for example The Universe Sentinel [1983] 1 AC 366,393 per Lord Cross,401 per Lord Scarman;
Electricity Generation Corporation v Woodside Energy Ltd [2013] WASCA 36 at [25] per McLure P.
35 The possibility that a threat to perform an unlawful act may constitute legitimate pressure remains
open. See J. Edelman and E. Bant, Unjust Enrichment (Oxford: Hart, 2nd ed, 2016) 204-208.
(2023) 86(1) MLR 238–248 243
exerted.36 It is also worth highlighting that, even where the relevant threatened
action was to perform an unlawful act, merely threatening to act unlawfully is
usually not itself unlawful,37 though it is sometimes ambiguously described as
‘wrongful’.38 It follows that restricting the category of conduct that may con-
stitute economic duress only to threats to act unlawfully requires a positive
justification.
A common argument advanced for rejecting the existence of lawful act duress
is that it would make the scope of economic duress more certain, which would
in turn avoid ‘protracted and expensive litigation about the existence and scope’
of the doctrine.39 But uncertainty is rarely a convincing reason for refusing to do
what justice otherwise demands.40 Moreover, as Professors Bigwood and Diet-
rich have persuasively explained, ‘criticism of jural concepts … as too uncertain
or vague is often selectively made’ and ‘the law, given its complex nature and
society’s expectations of what it is meant to deliver, cannot avoid resort to con-
cepts whose meanings are unfixed and whose applications leave considerable
scope for expert judgement’.41 In addition to asserting the general weakness of
arguments for private law rules predicated only upon certainty, Bigwood and
Dietrich respond more directly to the charge of uncertainty levelled against the
concept of lawful act duress itself. While recognising that this ‘concept remains
uncertain in its exposition’, those authors claim that this is ‘primarily a result
of serial failure … to articulate a persuasive normative basis for intervention in
cases of successful coercion by lawful means’.42
Although space limitations preclude a complete exploration of that norma-
tive basis here, one plausible, ‘instrumental’,43 explanation of lawful act duress
is as follows. The reason that the state’s enforcement of certain kinds of agree-
ments is ever justified is that enforcing such agreements protects and promotes
the practice of voluntary undertaking,44 which enhances valuable ‘personal au-
tonomy’ in the Razian sense.45 On this view, enforcing agreements procured by
certain forms of pressure is not justified because it enables abuse of the prac-
tice of voluntary undertaking. Obviously, however, accurately assessing whether
36 This observation is most clearly demonstrated by the crime of blackmail. Relatedly, consider that
if combining a threat to act lawfully with a particular kind of demand may occasionally justify
the imposition of criminal sanctions against the threatening party, it would be odd if combining
a threat to act lawfully with a particular kind of demand did not in some other circumstances
justify the state merely refusing to enforce a contract resulting from the threat.
37 An exception is threats of serious violence.
38 See for example S. Smith, ‘Contracting under Pressure: A Theory of Duress’ (1997) 56 CLJ 343,
351.
39 P. Davies and W. Day, ‘“Lawful Act” Duress (Again)’ (2020) 136 LQR 7, 12. A similar argument
was upheld by the New South Wales Court of Appeal in ANZ Banking Group Ltd v Karam [2005]
NSWCA 344; (2005) 64 NSWLR 149 at [66] per Basten JA.
40 This is not to say that considerations of certainty are irrelevant in private law.
41 See R. Bigwood and J. Dietrich, ‘Uncertainty in Private Law: Rhetorical Device or Substantive
Legal Argument’ (2021) 45(1) MULR 60, 62.
42 ibid, 84.
43 For a non-instrumental, ‘formal’, justification for a (limited) doctrine of lawful act duress, see H.
Stewart, ‘A Formal Approach to Contractual Duress’ (1997) 47 UTLJ 175, 189.
44 See J. Raz, ‘Promises in Morality and Law’ (1982) 95 Harvard LR 916, 937 and D. Kimel, From
Promise to Contract (Oxford: Hart, 2003) ch 3.
45 See J. Raz, The Morality of Freedom (Oxford: OUP, 1986) 369-429.
244 (2023) 86(1) MLR 238–248
every putative case of valid contracting enhances or reduces valuable ‘personal

autonomy’ is infeasible. Thus, as Professor Hart explained,46 instead of always
requiring parties seeking to enforce a contract to justify this enforcement, the
law takes the more practical and efficient approach of stipulating that proof of
the various requirements for contract formation generates a defeasible legal en-
titlement to have the relevant agreement enforced with the onus then shifting
to the other party to demonstrate, via the law’s various defensive doctrines, in-
cluding duress, that enforcement is, all relevant matters considered, not in fact
justified.47
Accordingly, on this view, the law of duress ‘acts as a conservative force’ hin-
dering the use of forms of pressure that would undermine the practice of volun-
tary undertaking and realisation of the valuable ‘personal autonomy’ this prac-
tice seeks to protect and promote.48 The unconscionability test endorsed by the
majority in Times Travel is thus simply the doctrinal mechanism by which the
inquiry into whether, given the nature of the pressure imposed, enforcement of
the contract is justified is conducted.
THE BASIS FOR LAWFUL ACT DURESS
Bad Faith
In the Court of Appeal’s decision in Times Travel, Richards LJ (with whom

Moylan Asplin LJJ agreed) held that PIAC’s conduct did not amount to lawful
act duress because its threat and accompanying demand to Times Travel was
not made in bad faith. As observed, for Lord Burrows the absence of bad faith
was also determinative of the case.49 However, it is submitted that the major-
ity of the Supreme Court was correct not to endorse an analysis of lawful act
economic duress focused upon the existence of a bad faith demand. In addition
to the reasons given by Lord Hodge for rejecting such an approach outlined
above and which we regard as broadly persuasive, we add two observations.50
One is that determination of whether legal intervention is (un)justified where
a defendant has not violated any legally recognised right is conventionally ex-
amined through the lens of unconscionability, and it is desirable for courts to
resist introducing new general concepts of ‘indeterminate or concealed multi-
ple reference’,51 such as bad faith, unless relevant existing concepts are clearly
inappropriate.
The other observation is that there are decisions where a remedy has been
awarded for lawful act duress, albeit not lawful act economic duress, despite
the threatening party’s demand having been made in good faith. In Williams
46 Hart, n 31 above, 174.

47 See further G. Lamond, ‘The Coerciveness of Law’ (2000) OJLS 39, 50.
48 See Raz, n 42 above, 934.
50 Further possible difficulties are considered in N. Tamblyn, ‘Causation and Bad Faith in Economic
Duress’ (2011) JCL 140, 147, 151.
51 See J. Stone, Legal System and Lawyers Reasonings (Sydney: Maitland Publications, 1964) 265-266.
(2023) 86(1) MLR 238–248 245
v Bayley,52 for example, the claimant’s son forged promissory notes and cashed
them with the defendant bankers.When the forgery was discovered,the bankers
insisted upon the claimant father providing security for his son’s debt and threat-
ened to have the son prosecuted unless this occurred. The claimant executed an
agreement to give an equitable mortgage as security for his son’s debt. Although
there was no evidence that the bankers’ demand was made in bad faith,53 the
House of Lords held that the agreement should be rescinded. By analogy with
Williams v Bayley, it is plausible that there will be cases where contractual en-
forcement is unjustifiable on the basis of lawful act economic duress where a
threatening party has deliberately manoeuvred the threatened party into a po-
sition of vulnerability to a demand via illegal conduct even though the demand
was made in good faith.
Unconscionability
As explained, Lord Hodge regarded ‘morally reprehensible’ conduct rendering

contractual enforcement unconscionable as providing the juridical standard for
assessing the existence of lawful act duress. This approach is preferable to the
alternatives. First, if lawful act duress does not involve the violation of a legally
recognised right, it is difficult to imagine any way of identifying, at a general
level, the basis for the doctrine other than by invoking unconscionability or a
closely related concept and we reiterate the difficulties outlined above with the
most obvious alternative, bad faith. Secondly, because there are probably mul-
tiple irreducibly distinct reasons for not enforcing a putatively valid contract
induced by a threat to perform a lawful act,54 it is inevitable that any princi-
ple that purportedly unifies these distinct bases for refusing enforcement must
be expressed at a high level of generality. Finally, as observed above, English
law has consistently analysed the availability of rescission in cases not involv-
ing a rights violation in terms of the existence of conduct that would render
contractual enforcement unconscionable. Despite this, we nevertheless endorse
Lord Burrows’ recent observation in Tinker v HMRC55 that, wherever possible,
one should seek to clarify more precisely what the ‘vague phrase’ of uncon-
scionability means in relation to the particular facts.
As noted, in Times Travel both Lord Hodge and Lord Burrows relied heavily
upon the decisions in Borelli and The Cenk K in attempting to identify a possible
basis for why the pressure PIAC applied to Times Travel might have been ille-
gitimate. A plausible explanation for why contractual enforcement was regarded
as unconscionable – and accordingly unjustified – in those cases is that they are
examples of a general reluctance on the part of courts to enforce a contract
where a party has engaged in unlawful or dishonest conduct that is a substantial
52 n 15 above.
53 ibid, 218 per Lord Westbury.
54 Both judgments in Times Travel recognise two irreducibly distinct categories of lawful act duress
and Bigwood identifies three distinct reasons why a lawful threat might be ‘illegitimate’: see
‘Coercion in Contract: The Theoretical Constructs of Duress’ (1996) 46 UTLJ 201, 217.
55 [2021] UKSC 39 at [28].
246 (2023) 86(1) MLR 238–248
cause of procurement of the other party’s agreement to the contract.56 Although

the existence of unlawful or dishonest conduct having the effect just described
might not be a necessary feature of all instances of lawful act duress, we do
suggest this is one situation where a contract usually should not be enforced.57
It is of course a contested theoretical question why courts should refuse to en-
force a contract where its formation is substantially connected to unlawful or
dishonest conduct. But it is difficult to resist the view that English law generally
takes this approach and, as suggested above, one plausible explanation for this
is that enforcing contracts procured via these means impedes the realisation of
valuable ‘personal autonomy’ that the institution of contracting seeks to protect
and promote.
DEFENDING THE RESULT IN TIMES TRAVEL
Writing before judgment was handed down by the Supreme Court in Times
Travel, Dietrich and Bigwood argued that Times Travel ought to have been en-
titled to avoid the New Agreement. Those authors characterise PIAC as having
deliberately used its ‘peculiar capacity – as a situational monopolist – to crip-
ple the claimant’s business not only to renegotiate a new agency agreement …
but also to include a release of past debts acknowledged to be owed … despite
earlier reassurances that those debts would be paid’.58 The basis for this latter
suggestion is unclear. At trial, Warren J observed that an assurance was given by
PIAC that outstanding Overriding Commission ‘would be sorted out’.59 How-
ever, Times Travel’s claim for unpaid Overriding Commission failed and there
does not appear to be any finding of an assurance regarding the payment of
other commission under the Original Agreement or acknowledgment that this
commission was owing.Further,PIAC genuinely believe that it had not failed to
pay any Basic Commission owed. Dietrich and Bigwood’s argument that lawful
act duress should have been recognised in Times Travel must, therefore, depend
upon it having been illegitimate for PIAC to use its situational monopoly po-
sition to obtain the release. But there is no authority for this proposition and,
as now explained, Times Travel is materially indistinguishable from CTN Cash
and Carry Ltd v Gallaher Ltd60 (CTN Cash) in this regard.
In CTN Cash, a lawful threat by the defendants to withdraw the claimant’s
credit facilities caused the claimant to comply with a demand by the defendant
to pay an invoice for goods that the defendant erroneously believed was due.
A claim for recovery of the payment made in respect of that invoice on the
56 We note, however, that under the more expansive doctrine of promissory ‘estoppel’ that exists
in Australia, a similar (and perhaps the same) result might have been achieved in The Cenk K by
preventing the owner of the ship from resiling from its promise to make good any loss suffered
by the charterer. See, in particular, Walton Stores (Interstate) Ltd v Maher (1988) 164 CLR 387.
57 Put another way, the state’s enforcement of a contract so procured against the threatened party is
not justified because doing so is inconsistent with the valuable form of personal autonomy that
the institution of contracting exists to realise and promote.
58 Dietrich and Bigwood n 41 above at 88-89.
59 Times Travel trial n 5 above at [52]-[53].
60 [1994] 4 All ER 714.
(2023) 86(1) MLR 238–248 247
ground that the payment had been procured via economic duress was rejected.
In both CTN Cash and Times Travel, the threatening party used its position as a
situational monopolist to extract a benefit from the threatened party based upon
a genuine, albeit mistaken, belief. In CTN Cash, this benefit was the payment
of a debt mistakenly believed to be owing. In Times Travel, the benefit PIAC
obtained was the release of claims for unpaid Basic Commission that PIAC
genuinely, albeit mistakenly, did not believe were owed.
It is also significant that courts have generally refused to intervene merely
because a threatening party has procured a benefit via use of monopoly power.
An example is Smith v William Charlick Ltd,61 where the Australian Wheat
Harvest Board threatened to refuse to do further business with the claimant
miller unless the miller paid a surcharge to it, which was intended to redress an
oversupply of discounted wheat to the miller. Although the Wheat Board had a
monopoly on supply and the pressure imposed by the Wheat Board substantially
caused the miller’s payment of the surcharge, the High Court of Australia held
that this pressure was not illegitimate.
The pressure imposed by PIAC upon Times Travel should not be regarded
as having been illegitimate for the following reasons. First, principally due to
the importance of ‘freedom of contract’, threats not to contract should only ex-
ceptionally, if ever, be regarded as illegitimate.62 Secondly, the authorities make
clear that the threatening party taking advantage of a situational monopoly is
insufficient to render an otherwise legitimate threat illegitimate because, as Lord
Hodge explained, English law does not recognise any general doctrine of ‘in-
equality of bargaining power’ in contract.63 Thirdly, and as explained above, it is
difficult to identify any material basis upon which the pressure imposed in Times
Travel can be distinguished from that in CTN Cash. Fourthly, PIAC honestly,
albeit erroneously, believed that it had not failed to pay any Basic Commission
to Times Travel owing under the Original Agreement. Fifthly, PIAC correctly
believed that it was legally entitled to demand that Times Travel enter into
the New Agreement. Finally, PIAC did not manoeuvre Times Travel into a
position of increased vulnerability to its demand substantially via conduct that
was unlawful or dishonest. Rather, it did so through the lawful exercise of a
contractual power.
61 (1924) 34 CLR 38.

62 The contrary decision in The Cenk K n 18 above is explicable on the grounds of the ‘deliberate
manoeuvring’ via misleading conduct that preceded the relevant threat not to contract.
248 (2023) 86(1) MLR 238–248

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The Possibility of Lawful Act Economic

3 ibid at [2], [19]-[25], [30].

re-appoint Times Travel as one of its sales agents on terms outlined in a

Lord Hodge DPSC

Lord Burrows JSC

Following a comprehensive review of the authorities and academic commen-

23 ibidat [54], [56]-[57].

a position of vulnerability (or increased vulnerability) to the demand to waive

SHOULD A CONTRACT EVER BE VOIDABLE FOR LAWFUL ACT

every putative case of valid contracting enhances or reduces valuable ‘personal

THE BASIS FOR LAWFUL ACT DURESS

In the Court of Appeal’s decision in Times Travel, Richards LJ (with whom

46 Hart, n 31 above, 174.

As explained, Lord Hodge regarded ‘morally reprehensible’ conduct rendering

cause of procurement of the other party’s agreement to the contract.56 Although

DEFENDING THE RESULT IN TIMES TRAVEL

61 (1924) 34 CLR 38.

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