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Home arrow Law arrow The principles of the law of restitution
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(i) The Time Factor

The time at which the compulsion must have been operating depends on the nature of the claim. For the purposes of setting aside a contract, the compulsion must have been operating when the contract was made. Where, however, the claimant wishes to recover a non-contractual payment it is simply sufficient to show that the compulsion was operative at the time of the payment.

(ii) The Contract Must Cease to Be Operative Before Restitutionary Remedies Can Be Awarded

If the claimant has transferred a benefit to the defendant pursuant to a contract which he or she was compelled to enter into, the claimant cannot obtain restitution until the contract has been set aside. This is because of the fundamental principle that restitutionary relief cannot be used to subvert contractual obligations.[1] Where the defendant compels the claimant to make a contract that contract will be rendered voidable and not void.[2] Consequently, if the claimant wishes to recover benefits transferred under such a contract by reason of compulsion it is first necessary to rescind the contract at Common Law.[3] Rescission will be barred, however, if the claimant affirmed it after the compulsion had ceased to operate;[4] if rescission has been unreasonably delayed; if third-party rights have intervened; or if the claimant is unable to make counter-restitution to the defendant of any benefits which the claimant had received from the defendant.[5]

  • [1] See Chapter 7.
  • [2] The Universe Sentinel [1983] 1 AC 366, 383 (Lord Diplock) and 400 (Lord Scarman); TheEvia Luck [1992]2 AC 152, 168 (Lord Goff); Halpern v Halpern [2008] QB 195. In Barton v Armstrong [1976] AC 104, 120 thePrivy Council found that threats to kill the claimant rendered a deed void, where the deed was entered into as aresult of the threats. This decision is explicable either because of the extreme nature of the threats or, morelikely, because the claimant had sought a declaration that the deed was void and the form of the declarationwhich was granted had not been challenged by the defendant. Cf DJ Lanham, ‘Duress and Void Contracts’(1966) 29 MLR 615.
  • [3] Whelpdale’s case (1605) 5 Co Rep 119a. See p 23, above.
  • [4] Mutual Finance Ltd v John Wetton and Sons Ltd [1937] 2 KB 389, 397 (Porter J). In The Atlantic Baron[1979] QB 705 affirmation of a contract prevented the claimant from rescinding it for economic duress.
  • [5] Halpern v Halpern [2007] EWCA Civ 291, [2008] QB 195. See p 25, above.
 
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