Economic duress to change the agreed contract price won’t work – Kolmar v Traxpo, High Court

You’ve secured an important deal to sell some products to a major customer. You’ve got an agreement with a supplier to buy the product. Everything’s in place…that is until your supplier suddenly decides to put pressure on you to buy at a higher price than otherwise agreed. You’re caught between a rock and a hard place. You don’t want to pay any more money but you need to do so in order to fulfil that important customer deal. What should you do? Should you pay extra, supply the customer and then seek to claim later that your supplier broke an agree deal? Would that work?

That was the situation faced by Kolmar in this case. It did agree to pay the extra amount and then sought a recovery of the overpaid sums in restitution. The High Court awarded victory to Kolmar. It was important that Kolmar had clearly agreed to purchase at an agreed price and that it had only agreed to revised price based on illegitimate pressure that left it with no practical choice. The Court decided that it had no real alternative but to agree to the supplier’s demands and get its redress later.