Johan De Lange | Schoemanlaw Inc 

Category: Contract Law  

In contract law, the principle of consensus ad idem, or mutual agreement, forms the cornerstone of a valid contract. However, when this consensus is obtained improperly, either through misrepresentation, duress, undue influence, or other illegitimate means, it raises questions about the validity and enforceability of the contract. This article delves into the concept of improperly obtained consensus, with a specific focus on duress, examining the rules and principles that govern this area of law. 

Improperly Obtained Consensus: An Overview 

When a person enters into a contract based on a misrepresentation made to them or due to duress or undue influence exerted by the other party, the agreement is not necessarily void ab initio. The parties' consensus is not lacking, as they know precisely the terms and parties involved. However, the consensus may be flawed due to the improper means used to obtain it, rendering the contract voidable at the instance of the innocent party. 

Restitutio in Integrum: Rescission and Restitution 

The remedy available to the innocent party in cases of improperly obtained consensus is restitutio in integrum, which involves rescission coupled with restitution. This remedy aims to restore both parties to their positions before entering into the contract. 

Originally rooted in Roman law, restitutio in integrum was granted for grounds such as fraud (dolus), duress (metus), or minority. In modern law, it serves as the remedy for setting aside a voidable contract based on various grounds. While an extra-judicial repudiation can suffice for rescission, a court order may be necessary when the right to rescind is disputed, especially when third parties might act based on the assumption that the contract still exists. 

The Election of the Innocent Party 

When faced with a contract induced by improper means, the innocent party has an election: to rescind the contract or to uphold it. This decision, once made and communicated, is final without the other party's consent. If the innocent party chooses to rescind, they must notify the other party, leading to the termination of the contract and a duty to restore any performance made under it. 

Delictual Damages: Recovering Financial Losses 

The conduct leading to the improper consensus often constitutes a delict, allowing the innocent party to recover damages irrespective of affirming or rescinding the contract. These damages aim to place the innocent party in the financial position they would have been in had the improper means not been used. 

Duress (Metus): Improper Pressure Leading to Invalid Consent 

Duress, or metus, involves improper pressure amounting to intimidation, forcing a party to consent to a contract due to fear inspired by an illegitimate threat. While a contract induced by duress may be valid, it is voidable at the option of the threatened party. The threat must be both unlawful and an effective cause of the contract, leading the threatened party to contract differently or not at all. 

Elements of Duress 

There are several elements required to establish duress: 

1. Actual violence or reasonable fear. 

2. The fear must be caused by a threat of considerable harm. 

3. The threat must be imminent or inevitable. 

4. The threat or intimidation must be contra bonos mores. 

5. The moral pressure used must have caused damage. 

Nature of Coercion in Duress 

Duress involves coercion of the will rather than physical force. The force operates on the victim's mind, forcing a choice between entering into the contract or facing harm. Even when violence is used, the coercion is by threat, implying that such violence will continue unless the victim agrees to the contract. 

Reasonableness of the Fear 

The fear induced by the threat should be sufficiently grave to affect a reasonably steadfast person. While some argue that the fear must be reasonable, others suggest otherwise, emphasising that an unreasonable fear should not deprive a victim of relief if the threat were intended and effective in inducing the contract. 

Object and Imminence of the Threat 

The threat must be directed at life, bodily integrity, property, or honour. It should be sufficiently imminent to cause fear, although relief may still be granted if the threatened harm was neither imminent nor inevitable but forced the victim to enter the contract without reasonable alternatives. 

The Unlawfulness of the Threat 

For duress to be established, the threat must be unlawful or contra bonos mores. This includes threats of physical harm or threats made for illegitimate purposes. While enforcing one's rights through civil action is generally lawful, threats of criminal prosecution, unless warranted, may amount to duress. 

Conclusion 

The principle of consensus ad idem is fundamental to contract law, but when consensus is obtained improperly through duress or other illegitimate means, the contract becomes voidable at the option of the innocent party. Restitutio in integrum serves as the remedy, aiming to restore the parties to their pre-contractual positions. Understanding the elements and principles governing duress is crucial in determining the validity and enforceability of contracts obtained through improper means. Contact an expert at Schoemanlaw for your contractual needs.  

Johan De Lange | Schoemanlaw Inc
Attorney
https://schoemanlaw.co.za/our-services/contract-drafting/