Tag: contract

economic duress

How does Economic Duress affect a contract?

Posted on by admin in transaction advisory

Economic duress is a legal concept that arises in the context of contract law. It refers to a situation where one party to a contract is forced to enter into or modify the terms of a contract due to economic pressure or coercion exerted by the other party. The party claiming economic duress typically has no reasonable alternative but to agree to the terms imposed on them.

In order to prove economic duress, the victim must establish that the other person acted improperly or illegally. Because duress rests on pressure rather than an absence of consent, the nature of the pressure is crucial in determining whether duress has occurred. As some sorts of pressure are legitimate, you must show that the pressure was unlawful.

The victim should also establish that improper or illegal conduct caused them to be afraid of economic hardship and the fear of hardship prevented him or her from engaging in a commercial agreement with free will.

ELEMENTS OF ECONOMIC DURESS

To win a case, you must generally establish the following elements:

  1. Unlawful or wrongful conduct: The party alleging economic duress must show that the other party engaged in some form of wrongful behaviour or acted unlawfully. This can include threats, blackmail, fraud, or other coercive tactics. See S.P.D.C.N. Ltd. v. Nwawka (2003) 6 NWLR (Pt. 815) 184, C.C.C. ThriftCredit Society v. Ekpo (2001) 17 NWLR (Pt. 743) 649.
  2. Lack of reasonable alternatives: The party under duress must demonstrate that they had no meaningful choice but to agree to the contract or modify its terms. They must show that they were facing financial hardship or other circumstances that left them with no viable alternatives.
  3. Causation: There must be a direct link between the wrongful conduct of the other party and the coerced agreement. The party alleging economic duress must show that the wrongful behaviour directly led to their acceptance of the contract or modification.

If economic duress is successfully proven, the affected party may seek remedies such as rescission (cancelling the contract), damages, or the enforcement of the contract under revised terms. However, it’s important to note that the specific legal standards and remedies for economic duress can vary depending on the jurisdiction and the particular facts of the case. It is advisable to consult with a legal professional for guidance tailored to your specific situation.

deeds

3 Important things you need to know about Deeds of Assignment in Nigeria

Posted on by admin in real estate, transaction advisory

Deeds of assignment are an important part of any land transaction in Nigeria. It acts as the main record of the transaction between the Seller and the Buyer. The Deed of Assignment transfers legal ownership of the property to the Buyer. This is distinct from a Contract of Sale, which merely transfers equitable ownership to the buyer.

Where a seller delivers a Deed of Assignment to the Buyer, the law assumes that the purchase price has been paid, and other necessary conditions have been fulfilled by the parties. The Seller cannot later say that he did not receive the purchase price.

Do you have a contract to sign?

Let’s help you review it!

Book a Consultation

Key elements of A Deed of Assignment

The Property’s Legal Owner must sign the Deeds of Assignment

A Deed of Assignment of Land must be executed by the Legal Owner of the property. Legal title is the actual ownership of the property. Legal title grants true ownership of the property, along with the bundle of rights that comes with land ownership.

A simple search at your state lands registry can help you identify the title holder. We recommend that you do this search as part of your due diligence process. This saves you stress in the future.

To register your title, you must have filed an application for Governor’s Consent with your State Lands Registry. In some situations, a seller may be eligible to apply for a Certificate of Occupancy.

Where a seller has not registered his title with the State Government, he/she can only transfer equitable title to the property. This means that the Legal title still resides in the last person who registered their title with the state.

A Rule of Thumb: If the seller is not the registered title holder, they cannot sign the Deed of Assignment

You must do your due diligence beforehand

Generally, the law expects a buyer to physically inspect the property he wants to purchase. He should also verify the title documents. A seller can only transfer his/her rights to the buyer. This means that if there are any limitations to their rights, those limitations will be passed on to the buyer. This can be quite infuriating.

This process should tell you whether you are buying the land from the right person, if there is any encumbrance on the land (such as an unpaid mortgage) or whether the land is suitable for your purposes. Facts discovered during the search process may affect your negotiations with the seller.

Recitals are Important

Recitals can make or break your Deeds of Assignment. This is because the root of title has to be clearly outlined and traceable within the recital. You must always ensure that there are no gaps in the chain of title between past owners of that property and the seller. Furthermore, any errors in your recital may lead to lengthy and costly litigation in the future. You could also experience immense frustration when trying to register your title with the government.

There is a widely-held perception that the recitals are legally inconsequential, since their role is fundamentally ‘scene-setting’ in nature and they do not automatically form part of the operative, legally binding agreement between the contracting parties. However, when a dispute arises and a court or arbitrator has to decipher the contract, the recitals may aid interpretation. They are, after all, clearly a part of the written contract in some way or other.

Milton & Cross Solicitors provides transaction advisory, due diligence and contract drafting services to individuals and businesses. We are always happy to assist you in coordinating and negotiating effective Deeds of Assignment.

Contact us to schedule a consultation

Book a Consultation today
duress

Economic Duress

Posted on by admin in entrepreneurship, Small Businesses, transaction advisory, wealth
duress

Duress can be described as an illegal threat or intimidation that induces another person to perform actions that he would otherwise not perform.

Initially, the doctrine of duress was limited to actual or imminent violence. Over the years, this theory has grown to include different types of hardship. These include economic hardship, the threat to seize or detain goods, the threat to land, and the threat to trade or industry.

Generally, a contract can be voided by one of the parties on grounds of Duress, undue, influence and unconscionable dealing. This is because his/her consent was obtained by conduct which the law considers unacceptable. As a result, the law presumes that there is no valid consensus, which would form a valid contract.

Economic Duress

Economic duress in contracts occurs where a party to a contract threatens to cancel a contract unless the other party agrees to their demands. This usually happens when the other party is stuck, and has no other practical options but to agree to the new terms of the contract. If you can prove you were forced into a contract through economic pressure, you can claim that you did not enter the contract on your free will.

 It is an established law that economic pressure can in law amount to duress. This duress, if proved, does not only render the transaction voidable. It may also be actionable as a tort, if it causes damage or loss. In other words, you are under duress when you have no choice, forcing you to agree to another party’s terms.

In Pao On v. Lau Yiu Long, the courts observed that the basis of duress does not merely depend upon the absence of consent. It requires the combination of pressure and absence of practical choice. In this context, two questions become all-important. The first is whether the pressure or threat is legitimate; and secondly, its effect on the victim.

To establish economic duress, you need to prove two universally accepted elements. These are, the exertion of illegitimate pressure by one party on the other; and significant causation i.e. a significant cause compelling or pressurizing the other party to act as he did.

Contact us
Explore our Services

Should an Employee who was not issued with an Employment letter give a written Notice to Resign?

Posted on by admin in Capital, entrepreneurship, investment advisory, Personal Finance, rule of law, Small Businesses, strategy, succession, transaction advisory, Uncategorized, wealth

know_your_rights_image

Amaka started working as an analyst in a commodities brokerage located in Victoria Island. Shortly before her employment, the Human Resources manager had resigned due to a dispute with the senior management. Due to this state of affairs, Amaka was not issued with an employment letter by the company and this state of affairs continued unremedied for the next year as the company searched for another Human Resources manager.

Amaka being a hard worker, was not bothered by the non-issuance of an employment letter, believing that she would prove her worth to the company over time. Moreover, she had been jobless for 2 years after the completion of her national youth service, and she was not going to let a simple matter as the non issuance of an employment letter prevent her from enjoying the fruits of such a juicy job.

Fast forward, and Amaka had worked punishing hours  for 3 years under a continuously tense environment worsened by her nasty boss who had been pursuing a vendetta against her for not accepting his lascivious overtures. He had promised to ruin her career and make life difficult for her whilst she remained under his employment. Despite consistently delivering stellar work, she was repeatedly given low grades during performance appraisals and consequently denied promotions. Amaka felt like a slave and was treated almost like one.

A few months later, Amaka received an offer from another investment bank, with considerably better terms of service and benefits. She promptly turned in her 2 weeks notice of resignation and patiently waited for  her salary at the end of the month. On the 30th day of the month, she received a letter from the Managing Director informing her that her resignation had been rejected on the grounds that it was company policy that employees were to give 1 (One) clear month’s notice or forfeit their monthly salary in lieu of notice. The letter was delivered by her boss with a malicious smirk on his toad-like face.

Amaka was incensed!!! This was a travesty, and she was not going to allow it. She promptly sought out legal advice on her options against the company.

The position of the law is that an employee has the right to resign with immediate effect, and the rejection of his resignation is tantamount to forced labour, and also against the time-honoured labour law principle that an employer cannot force himself on an unwilling employee. Employees are considered to have given notice of their intention to resign if they unambiguously inform their employers that they will terminate the contract on a certain date.

Furthermore, the Labour Act states that an employer must give an employee a written contract within 3 months of the commencement of the employment. The Labour Act also makes it unlawful for an employer to deduct the salary of employee by way of penalty, except in situations where the employer suffers a loss as a result of the misconduct of the employee.

From the facts  there was a failure of Amaka’s employers to provide her with an employment agreement stipulating the terms of her employment, including the process for terminating the employment relationship. The necessary conclusion is that the attempt by the company to withhold her salary on the grounds of non-adherence to company policy falls flat on the failure of the company to comply with the provisions of the Labour Act. The absence of an express requirement for 1 month notice implies that the employment relationship could be terminated at will. Consequently Amaka’s resignation is valid at law, and she can enforce her right to the withheld salary against the company by a suit at the National industrial Court.