|
|
Deals made under duress |
A compromise agreement that is entered into under economic duress and unconscionable conduct may become unenforceable. This was held by the Supreme Court of Queensland in Mitchell v Pacific Dawn P/L [2003] QSC 179. |
Mitchell was a builder contracted by Pacific Dawn to construct a multi-storey building. Mitchell wanted to recover monies due under the contract and commenced an action against Pacific Dawn. Pacific Dawn alleged that the parties had compromised their positions under the contract and that Mitchell had agreed to accept a lesser amount because of building delays. |
Mitchell asserted that there was no legally binding agreement to compromise, and if there was, the agreement was obtained under economic duress and unconscionable conduct. |
The Court agreed. The Court found that Pacific Dawn was aware of the pressures faced by Mitchell in finishing the work and meeting the demands of their subcontractors, and found that Pacific Dawn took advantage of the predicament by threatening litigation and offering a lesser amount than agreed upon. Such conduct was unconscionable, and Mitchell could repudiate the agreement. |
David Palmer |
david.palmer@cmlawyers.com.au |
