n South African Law Journal - Developing a test for economic duress in the South African law of contract : a comparative perspective




Until the recent Supreme Court of Appeal decision in Medscheme Holdings (Pty) Ltd v Bhamjee 2005 (5) SA 339 (SCA), the courts in South Africa consistently adopted the attitude that so-called 'economic duress' does not constitute a valid cause of action in our law of contract. In this sense, our law lags behind other jurisdictions, which have recognised for some time that threats of economic harm can be just as coercive as threats to person or property, especially in the modern commercial word. While the indication given in the Medscheme case that our law could develop to recognise cases of economic duress is a welcome one, the court's statement in this regard was merely obiter, and the court consequently undertook no analysis of the issue. In this article, an attempt is made to develop guidelines for dealing with such cases, in accordance with a more modern and coherent test for duress in contract generally. Much of the discussion involves comparative analyses of the authorities on economic duress in Anglo-American jurisdictions, since there is a dearth of authority on the point in South Africa.


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