Duress in contract law is focused on the concept of undue influence. 3 min read updated on February 01, 2023
Duress in contract law is focused on the concept of undue influence. This means the use of false imprisonment, threats, force, psychological pressure, or coercion to influence someone to act in a way that is not in their best interest or to act in a manner they do not wish to act.
Overview of Duress in Contract Law
Compelling someone to act in a manner against their better judgment or to do something they don't want to do is against the law. In the eyes of the law, any agreement made by a person under duress is invalid.
When duress is being determined, it is not based on the pressure exerted on the person but by their state of mind. In a contract law court proceeding, in order for duress to exist, there must be an illegal or wrongful act. When a claim of duress is filed, it is because a party wants to prove that their agreement to a contract wasn't made in good faith, making the essential requirements necessary to form a contract unfulfilled. If a party is claiming duress because another party is threatening to file suit for more money, that would be an invalid reason because filing suit is a legal action.
A party fearing for their safety can file duress. An example would be threatening to harm someone's family if they refused to sign a contract. If a wrongful or illegal threatened act takes place, that qualifies as duress.
Duress and Consideration
Consideration is what is referred to when bargaining and exchanging takes place regarding goods and services. It is vital, and without it, a contract does not exist. When one party benefits but the other only receives what was initially promised, this is duress.
Checking if consideration was given is a quick way to determine if there is a claim for duress. When a promise is made, the promisor is legally bound. This does not constitute consideration. If both parties benefit, then consideration has been established and there is no claim for duress.
There are three consideration types:
- Executory.
- Executed.
- Past consideration.
In contract law, consideration need only be sufficient versus adequate. In this context, adequate is the value of the consideration in terms of the economic value of the transaction. This does not mean, however, that the validity of the consideration is affected. Legally, the only requirement is that the consideration has a minimum economic value.
Contracts Entered Under Duress
Duress to an Individual
When an individual enters into a contract because of threats to that person physically, then the contract may be set aside as long as the threat of physical violence was the reason the person entered into the contract. In this case, there is no need to establish that the party would not have entered into the contract had there been no physical threat.
Duress to Goods
Claiming duress due to goods is not recognized as a valid reason to set a contract aside.
Economic Duress
Economic duress is a common claim in disputes of commercial contracts.
Proving Duress
Proving duress in a contract requires three things be provided:
- There must be an existing continuous contract between the defendant and the plaintiff.
- The defendant has threatened to end the preexisting contract.
- The plaintiff under duress accepts and enters into the contract because of the threat.
Courts also look at other factors when determining if one party is exerting undue pressure on the other party. These factors include:
- The timeframe in place for each party regarding the completion of contract performance.
- The level of bargaining power each party had when the agreement was made.
- The mental state of each party at the time the agreement was made.
- Determining if each party felt the agreement was fair when it was made.
- If any contract modification were in place when the contract was agreed to.
- Whether other legal remedies provide reasonable solutions to the situation.
- Civil lawsuit: When one person claims they've suffered a loss due to another person's actions.
- Mutual assent: A contract between two agreeing parties.
- A preponderance of evidence: When evidence by one party is more convincing than that of the other party.
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FAQs
Duress, in contract law, requires some sort of threat. If a party threatens to physically harm a person or their family, or damage their property, the contract is void because they did not sign the contract of their own free will.
What are the elements of duress in contract law? ›
Requirements of Duress
The party is in immediate threat of serious bodily harm or death. The threat made to the victim must be constant. For example, holding a gun to someone's head is considered a qualified threat. The party believes that the perpetrator of the act will carry out the threat.
What are the four requirements of duress? ›
For duress to qualify as a defense, four requirements must be met:
- The threat must be of serious bodily harm or death.
- The threatened harm must be greater than the harm caused by the crime.
- The threat must be immediate and inescapable.
- The defendant must have become involved in the situation through no fault of their own.
If you claim duress, it is up to you to demonstrate that you were forced. To do so, you need to prove two things: There was a serious threat of a wrongful or an unlawful action. There was no reasonable alternative to signing the contract.
What qualifies as signing under duress? ›
Being pressured to sign a contract under duress, also called coercion, means you're signing it against your will. In extreme cases, a party may threaten physical violence or even death unless you sign. Psychological pressure or lies about what could happen if you don't sign may also be considered duress.
How is duress proved? ›
To successfully assert a duress defense in California, you typically have to establish: you were threatened with harm if you refused to commit an unlawful act, and. you reasonably believed that your life would be in immediate danger if you did not comply.
What are 4 What are the requirements of undue influence? ›
The Most Important Evidence in an Undue Influence Claim. Under California financial elder abuse law, you must prove four elements to establish undue influence: (1) vulnerability of the victim, (2) apparent authority of the wrongdoer, (3) actions and tactics of the wrongdoer, and (4) an inequitable result.
What is unreasonable duress? ›
Duress refers to a situation where one person makes unlawful threats or otherwise engages in coercive behavior that causes another person to commit acts that they would otherwise not commit. In McCord v. Goode, 308 S.W.
What is not acting under duress? ›
Duress occurs when a person is prevented from acting (or not acting) according to free will. Forms of duress could fall under threatened physical harm or economic duress.
What is the key to look at with the duress defense? ›
For a Duress defense to apply, there must be an immediate threat to life and a subsequent demand or request to commit a criminal offense. A threat to destroy property or a distant threat would not be enough to support a Duress defense. Additionally there must be a reasonable belief in the viability of the threat.
It's not always easy to prove that duress existed, so you need legal representation to get the contract invalidated and avoid being held accountable for breach of contract.
Does duress void a contract? ›
A contract induced by physical duress—threat of bodily harm—is void; a contract induced by improper threats—another type of duress—is voidable. Voidable also are contracts induced by undue influence, where a weak will is overborne by a stronger one.
What is an example of duress in a contract? ›
Physical coercion and threats of harm are common examples of conduct that constitute duress. Another form of conduct that might constitute legal duress includes wrongfully withholding a party's property, or threatening to wrongfully withhold the property until a contract is signed.
How do you prove you signed a contract under duress? ›
While the victim may not have been physically forced to enter into the contract in these examples, they believed they would suffer detrimental consequences without entering. To prove a voidable contract under duress, a party must have evidence that they would have suffered from the other party's threats.
Can you be tricked into signing a contract? ›
Fraud in the inducement occurs when a person tricks another person into signing an agreement to one's disadvantage by using fraudulent statements and representations. Because fraud negates the “meeting of the minds” required of a contract, the injured party can seek damages or terminate the contract.
Is it illegal to coerce someone into signing a contract? ›
According to Article 397 of the Federal Law Number 3 of 1987, imprisonment will be applied if a person obtains a document's signature by force or threat; for example, to force an employee to sign a contract against his/her will is considered a criminal offense.
What are the three types of duress? ›
Three primary types of duress include physical duress (physical harm threats), economic duress (financial threats), and psychological duress (manipulation, deceit, or emotional pressure).
What are the 2 elements of duress? ›
(a) a threat has been made that will be carried out unless an offence is committed; and. (b) there is no reasonable way that the threat can be rendered ineffective; and.
What type of duress makes a contract void? ›
A contract induced by physical duress—threat of bodily harm—is void; a contract induced by improper threats—another type of duress—is voidable. Voidable also are contracts induced by undue influence, where a weak will is overborne by a stronger one.
