A. Gerry is a landlord in Limerick city and recently advertised one of his apartments for rent for €1,000 euro per month. Gerry was contacted by Conor, a notorious criminal who was recently released from Limerick prison after servicing a 5-year sentence for a serious assault. Conor states that he would like to rent the apartment and that if he does not lease the apartment to him for €300, there will be “dangerous consequences” for Gerry and his family. Gerry reluctantly agrees. With reference to case law, advise Gerry as to whether this contract is enforceable.
B. With reference to relevant case law, explain what the concept of “economic duress” is in contract law.
2. Patrick was selling his stove-cleaning business and had been approached by Linda who was interested in buying it. During the course of their negotiations, Patrick claimed that his income by cheque or bank transfer was around €40,000, but that he earned another €50,000 or so in cash. Patrick showed Linda his bank statements which confirmed an income of around €40,000 and then offered her a box file of cash receipts which he said would show the balance of €50,000 in cash received from customers.
Linda took one look at the box of crumpled receipts and said that she trusted John was telling her the truth. John shrugged and said she could check the receipts at any time. Linda then asked Patrick for his opinion about the potential for growth in the business. Patrick replied by asking Linda whether or not she had seen all the reports in the newspapers about the increased usage of stoves in private residences of about 15% per annum.
Linda agreed she had. Patrick then said “Those reports would match what I see on the ground.” Linda agreed to buy Patrick’s business, but neither the turnover nor the potential growth in the market were included as part of the contractual terms. Later, Linda discovered that the cash receipts only amounted to around €10,000 and not the €50,000 she had been led to believe. Further, due to changing environmental concerns sales of stoves were falling, not rising. Advise Linda as to her position under the law of contract with regard to these representations by Patrick.