Pao On v Lau Yiu Long [1980] AC 614 at 634 Subject to the same bars to rescission discussed in misrepresentation: Impossibility of restitution Prejudice to 3rd parties Affirmation Lapse of time Equitable discretion. VAT Registration No: 842417633. Appellant - Parties knew the work was to be paid for - The promise would be enforceable if it had been made prior to the act of consideration Part Payment: Part payment does not discharge the party from full payment- Pinnel’s Case (1602). Viscount Dilhorne. Was there an alternative option available to the party? Pao On v. Lau Yiu Long; Court: Privy Council: Full case name: Pao On and others v. Lau Yiu Long and another : Decided: 9 April 1979: Citation(s) [1979] UKPC 17, [1980] AC 614, [1979] HKLR 225: Case opinions; Lord Scarman: Court membership; Judge(s) sitting: Lord Wilberforce. Pao On v. Lau Yiu Long [1979] UKPC 17 is a contract law appeal case from the Court of Appeal of Hong Kong decided by the Judicial Committee of the Privy Council, concerning consideration and duress. Is commercial pressure duress in the eyes of the law? The case of Pao On v Lau Yiu Long [1980] shows that the promise to perform a contractual duty that is owed to a 3rd party perform can also be good consideration Part-payment of a debt ⇒ Part payment of debt is not good consideration Lau Yiu Long Registered Data Controller No: Z1821391. *You can also browse our support articles here >. However, P realized that D might profit from this agreement and demanded that this second agreement be replaced with one in which P was indemnified for any fall in share value but might also benefit from any rise in share value. It is relevant for English contract law. Judges To protect the share value, Pao On and Fu Chip agreed that Pao … Essential Cases: Contract Law provides a bridge between course textbooks and key case judgments. Do you have a 2:1 degree or higher? Instead of simply selling the building for cash, Lau and Pao did a swap deal for the shares in their companies; Shing On would get 4.2m $1 shares in Fu Chip, and Fu Chip bought all the shares of Shing On. But two recent decision of the highest authority - the decision of the Privy Council in Pao On v Lau Yiu Long [1980] AC 614 and Universe Tank Ships Inc. of Monrovia v International Transport Workers Federation [1982] 1 C.R. Copyright © 2003 - 2021 - LawTeacher is a trading name of All Answers Ltd, a company registered in England and Wales. To avoid this risk Pao On and Lau Yiu Long entered a second agreement whereby Lau Yiu Long agreed to re-purchase Pao On's shares, after a year, for $2.50 each. Overview. When past consideration is good consideration. Fearing a drop in share value of the public company would result, P and D made another agreement that P would not sell their shares for a while. This case document summarizes the facts and decision in Pao On and others v Lau Yiu Long and another [1980] AC 614. Fu Chip Investment Co Ltd.(Fu Chip), a public company majority owned by Lau Yiu Long, wished to buy a building owned by Tsuen Wan Shing On Estate Co. Ltd.(Shing On), whose majority shareholder was Pao On. Instead of simply selling the building for cash, Lau and Pao did a swap deal for the shares in their companies; 1) Main Agreement Shing On would get 4.2m $1 shares in Fu Chip, and Fu Chip bought all the shares of Shing On 2) Subsidiary Agreement To ensure the share price of Fu Chip suffered no shock, Pa… Pao then realised, if the Fu Chip share price rose over $2.50 in the year, the price would stay fixed and he would not get the gains on buying back, so he instead demanded that Lau would merely indemnify Pao if the share price fell below $2.50. Disclaimer: This work was produced by one of our expert legal writers, as a learning aid to help law students with their studies. Judicial Committee of the Privy Council cases, https://casebrief.fandom.com/wiki/Pao_On_v_Lau_Yiu_Long?oldid=11831. For economic duress, it must be shown: the victim’s consent to the contract was not a voluntary act on his part . Is commercial pressure duress in the eyes of the law? Viscount Dilhorne and Lords Wilberforce, Simon of Glaisdale, Salmon, and Scarman. Course. Duress is something beyond commercial pressure, such that there must be a coercion of will vitiating consent. Was there past consideration, i.e. Lord Scarman said that duress not only renders a contract voidable but is also a tort if it causes damage or loss (referring to Barton v Armstrong and Pao On v. Lau Yiu Long). Herbert James Bundy was a farmer. Pao On v Lau Yiu Long case brief. Thank you for helping build the largest language community on the internet. Pao On v Lau Yiu Long – Case Summary. Pao On agreed to sell shares in a company in shares to Fu Chip (controlled by Long) in consideration for certain shares. It is similar to duress. Parties must have understood that the act was to be compensated by payment or some other benefit. The act must have been done at the promisor's request. 8 Pao On v Lau Yiu Long … University. pao on lau yiu long wlr ukpc overview: pao on agreed to sell shares in company in shares to fu chip (controlled long) in consideration for certain shares. The "coercion of will" principle to show that any seeming agreement was given involuntarily and there was an absence of choice on the victim's part. Where the promisee is already contractually bound to the promisor, the general rule is that performance of an existing contractual obligation will not be good consideration unless some additional benefit is conferred. Having entered this second agreement, Pao On realised that, while it protected him from loss, it also meant he would not make a profit if the price of the shares rose during the year. His son, Michael, owned a business that was in financial trouble. Consideration, Duress, Past consideration Fu Chip Investment Co Ltd.(Fu Chip), a public company majority owned by Lau Yiu Long, wished to buy a building owned by Tsuen Wan Shing On Estate Co. Ltd.(Shing On), whose majority shareholder was Pao On. 6 Pao On v Lau Yiu Long [1980] AC 614. Consideration, economic duress, commercial pressure. Looking for a flexible role? Pao On v Long In Pao On v Lau Yiu Long, Lord Scarman gave 3 conditions for exception to rule that consideration must not be past. 2a) Pao's problem and resulting economic pressure. Pao On P agreed to sell their shares in the private company to D so that D could acquire the building. 7 Rainforest Trading Ltd v State Bank of India Singapore [2012] 2 SLR 713 at [29]. the exception in Pao On8 clearly applied: the court was prepared to find, 5 See State Bank of India Singapore v Rainforest Trading Ltd [2011] 4 SLR 699. Registered office: Venture House, Cross Street, Arnold, Nottingham, Nottinghamshire, NG5 7PJ. casebrief. Pao On and others v Lau Yiu Long and another (Hong Kong) Contains public sector information licensed under the Open Government Licence v3.0. Fearing that not agreeing to this would delay the main contract, D agreed. Pao On and Others v Lau Yiu Long and Others: PC 9 Apr 1979 (Hong Kong) The board was asked whether a contract of guarantee had been obtained by duress. Also, in case the share price dropped in that year, Lau agreed to buy 60% of the Fu Chip shares back from Pao at $2.50. The defendants claimed that the consideration for the indemnity agreement was past consideration and had only been agreed to under duress. (2) it was a contract procured by duress. Conditions for deciding whether economic duress was established: Did the party claiming to be coerced protest at the time? The document also includes supporting commentary from author Nicola Jackson. Viscount Dilhorne and Lords Wilberforce, Simon of Glaisdale, Salmon, and Scarman Citations: [1980] AC 614; [1979] 3 WLR 435; [1979] 3 All ER 65; (1979) 123 SJ 319; [1979] CLY 331. to. Reference this . D refused to comply with this, and the case reached the Privy Council. Setting a reading intention helps you organise your reading. Sometimes one side put very strong pressure on the other, or bullied them. In the case of Pao On v Lau Yiu Long, the claimants threatened they would not complete the main contract unless the defendant agreed to a guarantee to buy the shares back from the claimant at the price of $2.50 per share at the end of April 1974. The court found for the plaintiffs. Any information contained in this case summary does not constitute legal advice and should be treated as educational content only. To export a reference to this article please select a referencing stye below: Our academic writing and marking services can help you! Respondent It is relevant for English contract law. Pao On v Lau Yiu Long (1980) Lord Scarman said: “An act done before the giving of a promise to make a payment or to confer some other benefit can sometimes be consideration for the promise. Lord Scarman disposed of the question about past consideration, because a promise to perform a pre-existing contractual obligation to a third party can be good consideration, citing Lampleigh v Brathwait. Any opinions, findings, conclusions, or recommendations expressed in this material are those of the authors and do not reflect the views of LawTeacher.net. Pao On v Lau Yiu Long [1979] UKPC 17 is a contract law appeal case from the Court of Appeal of Hong Kong decided by the Privy Council, concerning duress.It is relevant for English contract law.. Facts. To ensure the share price of Fu Chip suffered no shock, Pao agreed to not sell 60% of the Fu Chip shares for at least one year. 15th Aug 2019 Pao On v Lau Yiu Long Year Performing existing duty not good consideration. The claimants owned shares in a private company. You can filter on reading intentions from the list, as well as view them within your profile.. Read the guide × Pao On v Lau Yiu Long (1980) AC 614 (REF7) established that for economic duress to apply the payment made or contract entered into by the innocent party must not have been done voluntarily. Pao On v Lau Yiu Long Privy Council. Issue Was there economic duress on the part of Pao? Pao On v Lau Yiu Long . Also, the pressure upon that party to enter the contract must be illegitimate. Contents. Even though the supposed exception in Pao On v Lau Yiu Long' ("Pao On") preserves the emphasis on the chronological order by carving out an emphasis on the promisor's request, the fact remains that the courts are often more than willing to find such "request", such that This is a paid feature. 1980 Unfair pressure? They agreed to protect the share value by agreeing that Pao On would keep 60% of the shares until a set date. The payment or benefit must have been legally enforceable had it been promised in advance. In-house law team. Pao On v Lau Yiu Long [1979] 3 WLR 435; [1979] UKPC. In return P would get shares in the public company. Contract Law … Facts: The plaintiffs (P) owned the shares of a private company which owned a building that the defendants (D) wanted to buy. After having entered the contract did the party take steps to avoid it. Pao On v. Lau Yiu Long (PC 1980) Neither the promise to do X, nor the actual doing of it, will be good consideration, if X is a thing that the party is already bound to do. Citation Pao made clear that unless he got this "guarantee agreement", he would not complete the main contract. Listen to the audio pronunciation of Pao On v Lau Yiu Long on pronouncekiwi. Lord Scarman: Keywords Exception to this rule was given in Pao On v Lau Yiu Long (1979): - Work must be done at the promisor’s request. Case Summary 4 factors are considered to be relevant (per Lord Scarman in the PC decision of Pao On v Lau Yiu Long): (i) whether coerced party had an alternative course of action open to him (e.g. It comes from (1) pressure amounting to compulsion of the will of the victim; and (2) the illegitimacy of the pressure exerted. Judicial Committee of the Privy Council Sign in Register; Hide. Applying the exception to the doctrine of past consideration in Lampleigh v Braithwaite (1615) Hob 105 Lord Scarman said that an act done before a promise was made was good consideration for that promise if it was done at the promisor’s request and the parties understood the act was to be paid for at a later date, and the payment or benefit would have been enforceable had it been promised in advance. Bundy then increased his exposure to £11,000 after the assistant manager of Lloyds failed to notify him of the company's true financial condition. Bond University. The defendants were the majority shareholders in a public company. Pao On v. Lau Yiu Long [1979] UKPC 17 is a contract law appeal case from the Court of Appeal of Hong Kong decided by the Judicial Committee of the Privy Council, concerning consideration and duress. Held: Lord Scarman said: ‘Duress, whatever form it takes, is a coercion of the will so as to vitiate consent. Pao On v Lau Yiu Long [1979] UKPC 17 is a contract law appeal case from the Court of Appeal of Hong Kong decided by the Privy Council, concerning duress. Past consideration can be valid consideration if the above three features are met. Area of law Pao On v Lau Yiu Long: Wikipedia, the Free Encyclopedia [home, info] Words similar to pao on v lau yiu long provided always that the basis of such recognition is that it must amount to a coercion of will, which vitiates consent. Facts. Pao On v Lau Yiu Long [1980] AC 614. Lau argued the guarantee agreement was not valid because; (1) there was no consideration, only in the past and under a pre-existing duty, and. Patel v Ali [1984] Pau On v Lau Yiu Long [1980] Payling v Naylor [2004] Peacock v Custins [2002] Peffer v Rigg [1977] Pemberton v Southwark London Borough Council [2000] Penny v Wimbledeon UDC [1899] Perre v Apand Pty Ltd [1999, Australia] Perry v Kendricks Transport [1956] Perry v Sidney Phillips [1982] Peyman v Lenjani [1985] When past consideration is good consideration. Case Brief Wiki is a FANDOM Lifestyle Community. Pharmaceutical Society of Great Britain v Boots Cash Chemists (Southern) Ltd. Take your favorite fandoms with you and never miss a beat. Finding for the plaintiff (Pao On); guarantee agreement upheld. He set out the test for determining whether past consideration can be valid consideration, of which all three features are present in this case: On the subject of duress, the Privy Council held that this was simply commercial pressure as per the nature of the market. Lord Simon of Glaisdale Lord Salmon. Free resources to assist you with your legal studies! insufficient consideration? Take a look at some weird laws from around the world! The defendants were majority shareholders in a public company. 1) act must have been done at the -'s -, 2) parties must have understood that the act was to be -, the payment must have been - - had it been promised in advance promisor request, rewarded, legally enforceable Pao On v Lau Yiu Long, [1980] AC 614 Sign in to disable ALL ads. Court Jump to: General, Art, Business, Computing, Medicine, Miscellaneous, Religion, Science, Slang, Sports, Tech, Phrases We found one dictionary with English definitions that includes the word pao on v lau yiu long: Click on the first link on a line below to go directly to a page where "pao on v lau yiu long" is defined. The plaintiffs (P) owned the shares of a private company which owned a building that the defendants (D) wanted to buy. Subsequently the shares did fall in value and Pao tried to enforce the guarantee agreement. Mr Bundy had already guaranteed the business with a £7,500 charge over his only asset, his farmhouse, to Lloyds Bank.Michael's company got into further financial difficulty. The consideration for the guarantee was the promise to perform according to the other contractual agreement signed by the parties. Lloyds foreclosed on the house when the money was not paid, and Bundy had a heart attack i… Barton v Armstrong, is a Privy Council decision on duress in Australian and English contract law. DISCLAIMER: This video is created and made available for educational purposes only. Pao On and others v. Lau Yiu Long and another (Hong Kong) Privy Council (9 Apr, 1979) 9 Apr, 1979 Company Registration No: 4964706. Country The share value did drop, and P sought to rely on the indemnity contract. Hong Kong The defendants were majority shareholders in a public company. . Pao On v Lau Yiu Long [1980] AC 614 Facts : Pao On agreed to sell shares to Fu Ship (controlled by Lau Yiu Long) in consideration for certain shares. Jump to: General, Art, Business, Computing, Medicine, Miscellaneous, Religion, Science, Slang, Sports, Tech, Phrases We found one dictionary that includes the word pao on v lau yiu long: General (1 matching dictionary). One issue is which threats are considered illegitimate in economic duress.
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