Understanding Duress in South African Contract Law

A cornerstone of South African contract law is that the parties must reach consensus in order for a valid agreement to come into effect. One of the more curious, and less frequently encountered possibilities that exclude consensus, is duress. This occurs when a party contracts through fear sparked by an unlawful threat, and not by an exercise of free will. While a valid contract requires genuine consensus between parties, agreements made under duress occupy a unique position – they are valid but voidable, meaning the victim can choose to either uphold or set aside the contract.

Five Pillars of Duress

South African courts, through landmark cases like Arend & Another v Astra Furnishers (Pty) Ltd[1] and BOE Bank Bpk v Van Zyl[2], have established five essential requirements for establishing duress:

1. There must be actual violence or reasonable fear. This doesn't necessarily mean physical violence - threats alone qualify, but these threats must be serious enough to induce a reasonable person in the victim's position to conclude the contract. Our courts assess this through a nuanced lens, considering both objective reasonableness and the victim's specific circumstances.

2. The threat must promise considerable harm to the victim or their family. South African law has recently begun recognising economic duress as a legal ground in certain cases. However, as emphasized in Medscheme Holdings (Pty) Ltd and Another v Bhamjee[3], mere aggressive business negotiation or an imbalance in bargaining power isn't enough - something more sinister is required.

3. The threatened harm must be imminent or inevitable. Victims must demonstrate that they either sought legal protection, protested, or pursued alternative courses of action before succumbing to the threat for a causal link to be present.

4. The threat must be unlawful or "contra bonis mores" (against public policy). A threat to pursue legitimate legal action, for instance, cannot constitute duress, no matter how intimidating it might feel.

5. The pressure must cause damage. The judgment of Broodryk v Smuts NO[4] evidences that simply showing that the victim entered obligations they wouldn't have otherwise accepted is sufficient to prove damage.

Remedies for Duress

Victims of duress aren't left powerless. They can choose to void the contract and seek restitution, resist the contract's enforcement, or even pursue delictual damages in appropriate cases. This flexibility ensures that justice can be tailored to each unique situation.

The Modern Reality

As South African commerce grows more complex, the doctrine of duress continues to evolve. The recognition of economic duress, while carefully limited, shows how courts are adapting principles to modern pressures. Yet the fundamental question remains unchanged: was genuine consent improperly obtained through fear?

For more information on how we can help you with duress in South African contract law, please contact Lauren Fine.