Fine Wines Limited (FWL) contract with Wine supplies Limited (WSL) to purchase

regular supplies of fine wines for sale to the public. The wine is purchased by FWL

on credit facilities provided by WSL. A consignment of wine is delivered in error to

the local students union and mysteriously disappears. WSL insist that FWL pay for

the consignment, threatening to cut off FWL's credit facilities (upon which FWL are

dependent) if they do not pay. FWL protest to WSL about their harsh attitude, but

pay for the lost consignment in order to protect their business. Later, FWL learn that

WSL have not been paying Customs duty on wine imported from the continent. FWL

threaten to report WSL to the Customs authorities if they do not refund the money

FWL have paid for the lost consignment and, further, discount all further supplies of

wine to them by 30%.

Advise the parties as to whether, and if so how, their legal obligations are affected by the threats made.