Decide: Principle: The law of economic duress comes into play when the apparent consent of the plaintiff was induced by pressure exercised by the defendant. As a result, such consent is revocable. Facts: Ryan’s father agrees to act as the guarantor when he needs to borrow a loan from the bank for starting a business undertaking. On account of his incompetence, among others, the undertaking soon runs into doldrums and Ryan incurs heavy losses within a very short span of time. He fails to repay any substantial fraction of the loan, prompting the bank to require his father to pay up the amount due from his son. However, the father refuses to pay his son’s debts and in his defence, states that he signed the guarantee under economic duress, since he would have to depend on his son for finances in the future. Is this a valid defence? (a) Yes, since the father would be left to fend for himself if he did not please his son when the latter wanted to borrow a loan from the bank. (b) Yes, since the father himself was dependant on the success of his son’s undertaking and this consideration weighed heavily on his mind while signing the guarantee. (c) No, since no son can exert economic duress upon his own father. (d) No, since there is nothing to suggest that the father was under economic duress while agreeing to be the guarantor for the loan borrowed by his son.
Posted on: Mon, 03 Mar 2014 05:53:55 +0000
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