Carillion Construction Ltd v Felix (Ltd) [2001] BLR 1
Contract – Economic duress – Settlement – Sub-contractors
Facts:
Carillion was a main contractor on a building site and subcontracted Felix to undertake work. The work was due for completion in January 2000 but Felix breached this obligation and estimated delivery by April 2000. Felix told Carillion that the completion of the work was dependent on payment of their account, which was several hundred thousand over what had been agreed. Felix threatened not to complete the works without payment of their account, although Carillion had disputed the amount and stated that such terms amounted to duress although made the payment. After all the works were completed, Carillion brought action claiming duress.
Issues:
Whether a threat to cease work unless an early settlement of an account that was over the agreed amount constituted duress.
Held:
The appeal by Carillion was allowed. The court held that for an agreement to rescind on grounds of duress, it must be proven that illegitimate pressure had been applied compelling Carillion to make the payment. DSND Subsea Ltd v Petroleum Geo Services ASA [2000] B.L.R. 530 was distinguished as there was no conduct or breach of the agreement that warranted DSND to issue a notice of termination, whereas in the present case, Felix told Carillion that the work would cease if their account was not settled before the completion of the works. This was a threat to breach the contract. They had already breached the contract by failing to meet the deadline for the completion of the works. The account was over what was agreed and was only paid by Carillion for fear that the works would not be completed before the final deadline in June 2000. The pressure applied was illegitimate and amounted to duress.
Updated 19 March 2026
This case summary remains accurate as a statement of the law on economic duress as established in Carillion Construction Ltd v Felix (UK) Ltd [2001] BLR 1. The core legal principles — that economic duress requires proof of illegitimate pressure that caused the claimant to enter into the agreement, and that a threat to breach a contract can constitute such illegitimate pressure — remain good law and continue to be applied in English courts. The distinction drawn from DSND Subsea Ltd v Petroleum Geo Services ASA [2000] BLR 530 also remains valid. Subsequent case law, including Progress Bulk Carriers Ltd v Tube City IMS LLC [2012] EWHC 273 (Comm) and the Supreme Court’s analysis in Times Travel (UK) Ltd v Pakistan International Airlines Corporation [2021] UKSC 40, has further developed the law of economic duress, particularly regarding what constitutes illegitimate pressure and the relevance of good faith. Readers should be aware that Times Travel is now the leading Supreme Court authority on economic duress and should be read alongside this case for a complete picture of the current law.
