Home Uncategorized Atlas Express Ltd v Kafco (Importers & Distributors) Ltd Case Brief

Atlas Express Ltd v Kafco (Importers & Distributors) Ltd Case Brief

Atlas Express Ltd v Kafco (Importers & Distributors) Ltd Case Summary

Atlas Express Ltd v Kafco (Importers & Distributors) Ltd Case Citation [1989] 1 All ER 641

Facts

The parties of the case involves a haulage company named Atlas Express Ltd. and a manufacturing company called Kafco. Kafco enters into an agreement with Atlas Express Ltd. to supply goods i.e. imported basket to various stores in small quantities which were not specified in the agreement.

Atlas Express assumed the delivery to be of 400 units but in actual it was of 200 units x 1.10 euro per unit which was resulting in loss for them. So they sent an empty truck given the condition to pay more per load or the baskets would not be delivered which would have resulted into huge loss for Kafco.

Kafco agreed to pay more and Atlas Express supplied the baskets in the market. But at the time e of payment Kafco refused to pay more than the agreed price in the agreement. In reply to this Atlas Express filed a complaint.

Issue

Had the agreement been made by pressurizing the other party be legally binding in a contract.

Rule

English Contract Law

Judgement

The court held that the respondent i.e. Kafco doesn’t require to pay more than agreed price mentioned in the contract between the former and Atlas Express.

The court mentioned that the claimant i.e. Atlas Express implied illegitimate pressure or coercion onto the situation Kafco were in that particular point of time when the former refused to deliver or supply goods unless payment of higher price is agreed.

The court also mentioned that Kafco were left with no alternatives except to agree to pay more than the agreed price in the contract. Hence, the agreement was made under economic duress and the defendant doesn’t need to pay more than agreed price in the contract.

Reasoning

Kafco had concurred under the presence of pressure; they had no an ideal opportunity to discover another provider so had no elective choices and had fought by declining to pay. Atlas Express being in position of dominance took the advantage of the situation or combination of circumstances at that very moment and coerced Kafco to agree to pay more than the agreed price in the contract. 

Compulsion of will or absence of choice/alternatives- to annul a future loss Kafco had to accept Atlas Express’s demand for a higher price as they were out of alternatives and didn’t have any choice but to accept this.

Current Day Significance

  1. North Ocean Shipping Company Limited v. Hyundai Construction Co. Ltd, was an exemplary instance of monetary coercion where the litigants were shipbuilders who took steps to end their agreement with the offended party, with no legitimate legitimization, except if the specified payment was expanded by 10%. It was held that this added up to financial pressure and hence, the offended party would be qualified for decline the 10% extra payment.
  2. In Chaggar v. Chaggar and Anor It was additionally seen that ill-conceived pressure should be recognized from the crude of the pressing factors of ordinary business bartering. It should be demonstrated that the pressing factor was of such nature that the casualty’s agree to the agreement was a compulsory follow up on his part. As such, it should be indicated that the instalment made or the agreement went into was not a wilful demonstration.

Endnotes

1. Chaggar v. Chaggar and Anor [2018] EWHC 1203 (QB)

2. North Ocean Shipping Company Limited v. Hyundai Construction Co. Ltd. [1979] QB 705

This article is written by Faiz Iqbal, from NMIMS’S School of Law

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