Economic Duress in Canadian Law: Towards a Principled Approach

Abstract

The emergence of economic duress as a distinct ground for relief from contractual obligations in Canada has been marked by a relatively uncritical adoption of the "overborne will" approach, with occasional reference to the "inequality of bargaining power" approach. Neither of these approaches is satisfactory. The "overborne will" theory presents an implausible picture of what happens to a person subject to duress, while the "inequality of bargaining power" approach obscures important differences between different grounds of contractual relief. This paper outlines a principled approach to economic duress, which focuses on the rights and opportunities of the parties to the transaction. The principled approach, which has been adopted implicitly or explicitly elsewhere, provides a satisfactory explanation of many leading Canadian cases on economic duress and should replace the other approaches.