Barton v Armstrong

A contract obtained by threats of violence can be set aside if the threats were a reason for entering it, even if not the main one.

Citation
[1976] AC 104
Court
Privy Council
Year
1976
Subject
Contract Law
Topic
Duress and undue influence

Facts

Mr Armstrong was the chairman and Mr Barton the managing director of Landmark Corporation, a property company in Sydney. After a power struggle, Mr Armstrong was removed as chairman. Mr Barton then executed a deed under which the company agreed to pay Mr Armstrong a large sum and to buy his shares on terms very favourable to him. Mr Barton later claimed that he had signed the deed because Mr Armstrong had threatened to have him murdered, and sought to have it set aside. The trial judge found that Mr Armstrong had made the threats, but that Mr Barton's main reason for signing was his commercial judgment that the deal was in the company's interests.

Legal principle

The Privy Council held, by a majority, that the deed could be set aside for duress. Where a person enters into a contract because of threats of violence or death, it is enough that the threats were a reason for entering into the contract, even if there were other reasons and even if the person would have signed anyway for commercial reasons. Once the threats are proved, the burden is on the person who made them to show that they contributed nothing to the decision, and Mr Armstrong had not discharged that burden. The court drew an analogy with fraudulent misrepresentation, where it is enough that the misrepresentation was one of the inducements.

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This summary is for study and revision and is not legal advice. Although our case summaries are checked for accuracy, we do not guarantee that they are free from errors or omissions. Always read the full judgment for the court's reasoning.

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