#consideration #contract

Facts: In August 1970 the defendants, owners of two tankers, chartered them to the plaintiffs for three years at a rate of 4.40 USD per ton per month. In 1971 the defendants were informed that the plaintiffs had no substantial assets, had suffered enormous losses, were dependent upon a third party’s support for survival and that the third party was willing to let them go into liquidation if the hire rates were not reduced. These statements were untrue. In August 1972 the defendants signed addenda (variation agreements) to the charterparties that the hire rate would be reduced substantially and then after a further dispute the hire price was further reduced. Some time later, the defendant discovered that the plaintiffs were making substantial profits on the vessels. The defendants gave the plaintiffs the option to revert to the original hire rate or of cancelling the charters. When the plaintiffs refused both options the defendants withdrew the vessels in May 1973. The plaintiffs claimed damages from the defendants on the ground that the vessels had been wrongfully withdrawn. The defendants claimed that they were entitled to the rescission of the addenda on the ground of fraudulent and innocent misrepresentation or duress. The court found that the plaintiffs were liable for fraudulent and innocent misrepresentation but that although the defendants were acting under pressure when they signed the addenda this was not such coercion as to amount to duress.

Occidental Worldwide Investment Corp. v Skibs A/s Avanti, Skibs A/s Glarona, Skibs A/s Navalis (The Siboen and the Sibotre) [1976] 1 Lloyd's Rep 293