Contracts effected with a bank on the basis of coercion or pressure: grounds for judicial intervention

This article critically examines duress as a doctrine rclied upon by guarantors or surcties to sct aside contracts of guarantees (the most common types of bank sccurity) they have given with inadcquatc undcrstanding or informcd consent. The articlc discusscs duress as "a form of coercion or pressure" which can impair any contractual assent resulting in a guarantcc being vitiated. In gencralterms though, the defence of duress is concerned mainly with the issue of whether the guarantor was placed under unacceptable pressure, or under an illegitimate threat. Common law and equitable eonccpts in rcspeet of duress apply equally to both guarantees and contracts generally. Nevertheless, sincc guarantees frequently involve persons who have close relationships to each other, there is probably a greater risk of duress being associated with guarantees than with other kinds of commercial contracts.