Alexander Barton v Alexander Ewan Armstrong and Others [1975] 2 W.L.R. 1050

Contract - Validity - Duress - Economic Duress - Threat to life - Unlawful pressure

Facts:

Barton and Armstrong were major company shareholders. Following a meeting, it was agreed that Barton would buy Armstrong’s interest. Barton and Armstrong had an agreement drawn up and it was executed. Barton then brought an action against Armstrong claiming that he was coerced into buying Armstrong’s share and that Armstrong had threatened to have him murdered if he did not buy it. Barton also alleged that Armstrong also exerted unlawful pressure over him, which Barton claimed made the terms of the agreement voidable.

Issues:

Whether Barton was in fact coerced or whether he signed the agreement out of commercial necessity and the coercion amounted to an ancillary motive. In either event, whether the agreement was voidable.

Held:

The appeal by Barton was allowed. It was held that the equitable rule allowed for any agreement that was as a result of some duress and fraudulent misrepresentation (in that all parties were consenting), did enable the agreement to be set aside and considered voidable. Further, even if the agreement was signed firstly out of commercial necessity, the fact that coercion had occurred made the agreement void as any duress was likely to have an effect on a party, forcing them to sign. It was for Armstrong to prove that there was no unlawful pressure or duress which coerced Barton into signing the contract. He was entitled to relief even if there were no threats coercing him to sign the contract.