Frank Stewart Dethridge Memorial Address 1996: Between a Rock and a Hard Place - Illegitimate Pressure in Commercial Negotiations

Abstract

Inspired by the case of the lost steamship 'Medina' in 1875 and subsequent litigation, Cooper discusses extortion in commercial salvage negotiations where one party may be in extremity or otherwise compulsed to accept an inequitable offer. Cooper phrases the broader question as one of whether these admiralty decisions, reflecting as they do the approach of the Court to commercial agreements made under the pressure of necessitative circumstances, have any role in developing or explaining the modern common law doctrine of economic duress, which the author answers in the affirmative.

Cooper also analyses how various cases have determined what amount of pressure is reasonable when making a salvage agreement, and by what criteria the limits of reasonableness are to be established or measured. Further, the author examines the present relationship between the remedial jurisdiction with respect to salvage and other maritime contracts and the modern common law principles applicable to the avoidance of agreements for duress, particularly economic duress. Cooper argues that lawful conduct becomes illegitimate where the pressure exerted by the exercise or the threat of exercise of lawful conduct is applied to support an extortionate demand. The operative underlying principle is the avoidance of unjust enrichment.

This copy of the address was originally published in Volume 12, No 1 of the MLAANZ Journal (1997).