Duress Contract Law: Everything You Need to Know
A duress contract law is a set of legal rules and standards that address issues arising from contracts that one party compels another party to enter into against their will or judgment by threats to harm them for noncompliance.3 min read
2. The Different Forms of Duress
3. Economic Duress
4. Determining Cases of Duress in Court
5. Undue Influence
6. How to Get Help
A duress contract law is a set of legal rules and standards that address issues arising from contracts that one party compels another party to enter into against their will or judgment by threats to harm them for noncompliance.
Duress is connected to the way undue influence is used. Duress is said to exist when a party is urgently threatened with physically harmful violence that can't be avoided except by compliance. It's the state of the victim's mind, which is induced by the threat that determines duress, and not the nature of the threat. Contracts signed under duress are typically invalidated by the court.
In some cases, duress goes beyond urgent, physical threats. Threatening the reputation and other personal belongings of a person to get them to sign a contract involuntarily also amounts to duress. Some cases of duress may not be easy to determine in court. However, when a threat of physical harm is proven, the proof can rapidly result in making the contract invalid and lead to charging the perpetrator with criminal offenses.
The Different Forms of Duress
Other forms of duress, when proven, grant the party who was forced into the agreement the alternative of canceling the contract. This isn't the case with threatened physical harm, in which the contract is invalid with no alternatives.
The following are some instances of duress:
- A threat of physical harm to the party, their family, or belongings.
- A threat of humiliating the party by blackmail or scandal.
- A threat of causing substantial financial loss to the party.
- A threat of criminally prosecuting or suing someone related to the party.
Not all threats made to compel another party's compliance are considered duress. For example, if one party to a contract threatens to sue another party to meet a condition, that wouldn't be duress because a lawsuit is legal.
An economic pressure is a form of duress typically associated with disputes arising from commercial contracts. There's said to be an economic duress when one party puts financial pressure on the other to unfairly compel them to accept a binding agreement against their will. Economic duress can't be said to exist just because prices are raised for services or goods by one party. However, if the prices are raised by the same entity that created the necessity for the services or goods, then, the court may allow a claim of economic duress.
Determining Cases of Duress in Court
To determine duress in a contract, the affected party has to provide the following:
- Proof that there's a running contract between them and the defendant.
- Proof that the accused party threatened them to enter into the contract.
- Proof that they were compelled to accept the conditions of the accused party because of the threat.
- Proof that the threat was urgent and potentially involved death or serious, physical harm, and was expressed by actions or words at the time of being threatened by the accused person.
- Proof that they truly feared that the threatening party would carry out their threat. The court recognizes that determining or measuring how afraid a party might have been is not easily practicable. However, it considers the reasonable possibility of the threat being carried out and also considers whether someone else in a similar situation would have been reasonably afraid.
- Proof that they had no reasonable way of escaping the threat, except by compliance.
Duress involves being forced into a contract through threats, while undue influence has to do with taking advantage of an entity through a position of trust. Only a superior entity or a respected person in a position of trust can exert undue influence on another. When such a person puts too much pressure on the other party to accept an agreement they would rather not accept, it constitutes undue influence.
If the affected party is able to provide proof of undue influence in court, they may be permitted to void the contract if they choose to. One of the major differences between undue influence and duress is whether or not the party doing the convincing is trusted by the other party or superior to them.
Duress-related laws aren't exclusively applicable to contract cases. If someone commits a crime under duress, they may not suffer criminal penalties. Duress-related cases can be tricky, but a knowledgeable, experienced, trusted lawyer can help make things easy and goofproof.
How to Get Help
If you need help with duress contract law, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.