While he might use differently gendered language today, the account of Steyn LJ in his judgement in First Energy v Hungarian National Bank that the purpose of ‘our’ law of contract is ‘to guard the reasonable expectations of honest men’. This can be understood as an impeccable encapsulation of case law and policy periods that seem to aim in this route but so regularly allow this implied (though much extra-judicial text is sufficient on its position). However, the attitude of ‘fair dealing’ – which Bingham LJ titles are at the core of good faith ideologies in Civil Law systems -may not reinforce his verdict in Interfoto Picture Library Ltd v Stiletto Visual Programmes Ltd. The wish to provide an upshot to the reasonable expectations of honest men very well might. The same could be said for loads of circumstances relating to contextual contract clarification values, from L. Schuler AG v Wickman Machine Tool Sales Ltd. to Wood v Brittan.
Assuming this method is crucial to determining and accepting commercial law as a complete concept, what will we get implied from the Supreme Court’s decision in Pakistan International Airline Corp. v Times Travel Ltd?
The PIA case involved a contract produced between PIA and Times Travel. Times was a travel agent who traded tickets on behalf of PIA. Commissions on such ticket sales amounted to a decent amount of their income. However, by 2012, Times demanded PIA be in debt on more than GBP1.5m in outstanding commissions. PIA debated this, designated it would considerably reduce Times’ ticket allocation under that contract, and pursued new terms. Consequently, PIA and Times arrived at a novel agreement which comprised a section under which Times decided not to maintain PIA liable for earlier unpaid commissions but preserved its tickets allocation. However, two years later, Times commenced proceedings to regain the unpaid commissions, demanding they arrive at the new agreement under duress.
Duress typically arises when there are threats to an individual or their belongings. Still, coercion can also be economical, normally a threat of an illegal act, such as a break of contract, which permits a contracting group with no further practical option but to agree to several provisions. The Supreme Court recognised that a reprehensible act, in bad faith, even if lawful, could be quantified as duress. However, at this juncture, the act was completely legal, although it was an action which the Supreme Court recognised “was the declaration of its control as a monopoly provider” (at that time, no other airline functioned with direct services from the UK). Therefore, the Supreme Court did not catch this act adequately egregious to total duress and specified that there would only be legalised act of economic duress in the circumstance of a waiver, where the victim had been manipulated into a defenceless situation by the other group. As a result, the other participants knew they had no protection from the demand that might be subscribed against them.
The method of the Supreme Court looks to locate the bar significantly in height while also giving that little supervision as to when it might be earnt. Furthermore, this appears to admit that egregious misuse of control, comprising abuse of vulnerable parties, is no more than a share of the irregular and flip-flop of commercial life. But is this in line with the sensible expectations of honest commercial individuals? That the Supreme Court’s decision sets such a low average for performance and makes compensation so hard to gain possibly gives us reason to replicate what reasonable expectations are and may reason us to silence and deliberate what that tells us about the environment and purpose of commercial law.
REFERENCES
Court, T.S. (n.d.). Pakistan International Airline Corporation (Respondent) v Times Travel (UK) Ltd (Appellant) - The Supreme Court. [online] www.supremecourt.uk. Available at: https://www.supremecourt.uk/cases/uksc-2019-0142.html [Accessed 8 May 2022].
sultanhassan27 (2022). What can Pakistan International Airlines Corp. v Times Travel tell us about the ‘reasonable expectations of honest men’? [online] Undergraduate Laws Blog. Available at: https://lawsblog.london.ac.uk/2022/02/17/what-can-pakistan-international-airlines-corp-v-times-travel-tell-us-about-the-reasonable-expectations-of-honest-men/ [Accessed 8 May 2022].
Cleveland & Co | External in-house counselTM. (2019). The limits of economic duress: Times Travel v Pakistan International Airlines. [online] Available at: https://cleveland-co.com/the-limits-of-economic-duress-times-travel-v-pakistan-international-airlines/.
Smith, T. (n.d.). Lawful Act Economic Duress: the Supreme Court’s decision in Pakistan International Airline Corp v Times Travel (UK) Ltd [2021] UKSC 40. [online] Travers Smith. Available at: https://www.traverssmith.com/knowledge/knowledge-container/lawful-act-economic-duress-the-supreme-courts-decision-in-pakistan-international-airline-corp-v-times-travel-uk-ltd-2021-uksc-40/.
www.mayerbrown.com. (n.d.). Economic duress – How far is too far? | Perspectives & Events | Mayer Brown. [online] Available at: https://www.mayerbrown.com/en/perspectives-events/publications/2019/06/lawful-act-duress-how-far-is-too-far.
Morton Fraser. (n.d.). Lawful Act Economic Duress and Commercial Contracts | Morton Fraser Lawyers. [online] Available at: https://www.morton-fraser.com/insights/lawful-act-economic-duress-and-commercial-contracts.
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