10 Mar 2022
A contract can be terminated for various reasons, such as breach of contract, the parties agree to terminate the agreement, the force majeure, and for duress or undue influence. In this article, we will focus on-laws on signing a contract under duress or undue influence. Duress is the act of using coercion, threats, or physiological pressure to induce someone to act contrary to their desires or interests; it means that the person is not working with freedom and signs a contract under duress, which means that you are signing it against your will. Indeed, it is necessary to make a difference between the defense of duress and defense of necessity; both can be used to display that there was no alternative other than binding the illegal act. Nevertheless, coercion is caused by another party’s actions, and necessity is a choice between two evils.
Different types of coercion are identified:
Emotional duress:
Someone who uses information against another person to make him/her undertake something unlawful or unwanted.
Physical duress:
When someone uses threat to life, or damage to health to make another person to act or no act. An example very clear of physical duress is when a person hits another person to force him/her to sign a contract.
Economic duress:
One person menaces another person to do financial damages to sign a contract. For example, to threaten the other party with increasing the prices.
Another term is ‘undue influence’, which is when one party have a supremacy advantage over the other, and they used it to force the other to sign the contract, for example, a father exercising undue influence under his son to sign a contract if not, he will fragment his relation with the son.
In the undue influence, there are two elements:
(1) must be a relationship of confidence; and
(2) the stronger party must control the other party.
To establish duress or undue influence in the signature of a contract is necessary to have an agreement that complies with the characteristics defined in Article 129 of the Federal law 5 of 1985 on the Civil Transactions Law of the United Arab Emirates (the Civil Code):
(1) The mutual consent to the essential elements of the contract: offer, acceptance and intention to create legal relations
(2) The object of the contract must be conceivable.
(3) The obligations arising out of the contract must have a lawful cause, a lawful purpose, according to the law.
An offer and an acceptance form a contract, and both are the expression of a will (Article 130-131). With an established agreement, The Civil Code defined duress in article 176 as coercion in which a person is induced to do something without his consent and in case of contractual liability. Duress may be made using violence or intimidation, and it can be physical or moral, for example, a threat to humiliate, discredit, or originate a scandal about the other party, even if these threats are for the family, it is considered duress (Article 178, Civil Code).
On the other hand, Article 177 and 179 of the Civil Code make the differences between:
- Duress by violence: this duress nullifies consent and invalidates choice. An example of duress by violence is when someone tries to murder another to obtain a contract’s signature. The degree is higher compared with the duress by intimidation.
- Duress by intimidation where the intimidation nullifies consent too but does not invalidate the choice. It is a lesser degree compared with the duress by violence. The duress’ seriousness varies according to the person, their age, ranks, and degree of their affection (Article 180); for example, the penalty will not be the same if the consequences of duress is murder, compare with force to sign a labor contract. It is essential to add that if the party is liable with duress, the victim mustn’t apply the deal after the threat has finished happening (Article 182, Civil Code).
First, the coercion must be proved with testimonies and clues before invalidating the resulting inactions. The importance of the will without pressure is established too in the Personal Status Law in article 101 “mind and choice are required in absolute terms.”
Further, under undue influence, it is possible to annul the contract (Article 189); when a person uses his/her advantage of power under another person to obtain the contract’s signature, the person under the undue influence could rescind the contract. The divorce contract is an agreement where is necessary the consent of the two parties; this consent must be without coercion, for example, following the Dubai Court of Cassation on 24 June 2008 in the Appeal Number 41 of 2008, a divorce contract under duress will be nulled because the decision must be free, without coercion or influence. According to Article 397 of the Federal Law Number 3 of 1987, imprisonment will be applied if a person obtains a document’s signature by force or threat; for example, to force an employee to sign a contract against his/her will is considered a criminal offense. Here the employee can fight the dispute before court with a legal representative beside. In the same code, there is protection for a person who commits a crime by the necessity of protecting himself or his money. The person will not be criminally responsible, but it will be necessary to demonstrate that the offender cannot avoid the danger in another way.