Understanding the Defense of Duress

In contract law, we must enter into contracts under our own free will. This means that contracts entered under pressure—legally, called duress—are invalid.

But life has a lot of stressors, and many contracts are entered into under circumstances that are stressful. Does that make almost every contract subject to be invalidated just because someone entering into that contract may have been experiencing a fair amount of pressure?

What Constitutes Actual Dures?

As a general rule, life pressure surrounding the signing of a contract is not relevant: the fact that if you don’t get that apartment rented, or you can’t pay your bills, doesn’t mean you entered into that lease under duress. The fact that you enter into an agreement because you fear being sued if you do not is also not legal duress.

Rather, legal duress must happen under illegal or at least, wrongful circumstances. So, you can imagine blackmail, or fraud, or threats to do something illegal all would be at least wrongful if not outright illegal, and would constitute a basis for a defense of duress.

Coercion, Threats and Influence

The same can be said for undue influence or coercion. Someone with control or authority over someone else, who uses their influence or power to push someone into entering into or into fulfilling a contract that they would not otherwise enter into, may be exerting legal duress on the other party.

Threats can sometimes be duress—depending on the threat. Threats to take valid legal action—for example, to sue someone if they don’t perform—is likely not duress, because the threat is only to do something that the other person has a legal right to do if there is a breach of an agreement.

But other threats can rise to the level of duress. For example, threatening to post negative information about someone’s business online, or threatening to interfere in someone’s business relationships, or threatening to breach a contract if another contract isn’t entered into are all forms of duress that can happen in the business context.

Of course, threats to do physical harm are also duress albeit less frequent in the business law realm.

Contractual Inequality

Duress often comes into play where there is inequality between sides. For example imagine a nursing home threatening to evict a resident if the family doesn’t agree to a contract, or imagine a caretaker of an infirm elderly person who threatens the elderly person with financial ruin, if the elderly person doesn’t sign certain documents or contracts.

Taking advantage of someone’s economic status, can constitute duress—for example, entering into a contract that you know the other side needs to remain financially soluble, could constitute duress.

To constitute duress in any fashion, there usually needs to be wholly unequal terms, or conditions that are wholly unfair to one side. That makes duress somewhat related to unconscionability, and they often will be included as defenses together in breach of contract actions.

Are there defenses to your breach of contract case? Call the West Palm Beach commercial litigation lawyers at Pike & Lustig today.

Sources:

vaia.com/en-us/explanations/law/contract-law/duress-in-contract/

upcounsel.com/duress-in-contract-law