Duress occurs when a person makes unlawful threats or otherwise engages in coercive behavior that causes another person to commit acts that the other person would not otherwise do. In contract law, duress occurs when a person is influenced to sign a contract under pressure. Common examples of duress include threats to personal liberty, threats of actual violence (such as forcing a person to sign a contract at gunpoint), or excessive economic pressure.
It is important to note that duress is not determined by the nature of the pressure a person is under, but by the state of mind induced in the victim. For instance, suppose that a 100 pound person threatened to punch a heavyweight professional boxer in the gut unless he signed a contract. Here, the threat of physical violence in this scenario may not rise to a level of duress given that the boxer may not be actually threatened by the smaller person.
Duress may be used as a defense to the commission of a crime. In criminal law, duress occurs when a person has been deprived of their free will by an immediate threat of violence or threat to personal liberty. A person acting under duress might not be held liable for the crimes they have committed. When a person raises a duress defense, the accused admits to committing the crime, but typically asserts that his actions should be excused due to the duress.
Duress may be raised as a defense to any crime except the intentional killing or attempted intentional killing of a person. While duress generally cannot be used as a defense to an intentional killing, it can be used as a defense to establish lack of premeditation for a first-degree murder charge.
In order to successfully plead the defense of duress, four elements must be proven:
- There must be a threat of death or serious bodily harm or injury;
- The threat must be immediate or imminent;
- The threat must create a reasonable fear in the defendant; and
- There must be no reasonable means for the defendant to escape from the threat, except to comply.
As mentioned above, a person may raise a duress defense if they are under pressure and forced to enter into a contract or discharge a contract by the threat of violence, personal liberty, or by excessive economic pressure. Duress can be applied when a contract is made or when a contract was modified.
Contracts may only be legally signed under a party’s free will. Thus, when a person raises a duress defense, the accused person is claiming that the contract should be invalid because they did not voluntarily enter into the contract. The person can only claim that the contract was invalid if the other party was the immediate cause and harm of the duress.
As mentioned above, one example of duress in contract law would be if one party signed the contract only because they were coerced or forced because they were threatened in a way.
In some cases, economic duress may serve to cancel a contract. Economic duress is commonly found in commercial contract disputes. Economic duress occurs when one party uses economic or financial pressure to unfairly force another party into a contract. Courts will look very closely at the nature of the economic duress claim to determine if the pressure is unfair. One example of economic duress is when one party threatens to breach a contract in “bad faith,” or threatens to withhold an admitted debt.
However, not all threats to breach a contract can be considered economic duress, especially if the threat was simply legal action or a typical event in average business dealings. A party which simply threatens to cancel the contract or which promises to bring a lawsuit to force performance is not committing duress. Additionally, the threat must come from the other party, not a third party or an outside force. For example, war is not a valid form of economic duress, even if one party was in physical danger.
Further, there must be no reasonable alternative but to accept the other party’s terms for economic duress to be proven. Economic duress is tough to utilize as a defense to a contract. This is due to the subjective standard of the inducement; that is, the threat of economic harm must actually induce the contract, taking into account the victim’s age, educational background, relationship of the parties, and the victim’s ability to receive advice.
Consideration is the bargaining and exchange of goods or services. Consideration is considered the heart of a contract, thus, without consideration, there is no contract. As noted above, contracts may only be legally signed under a party’s free will. One of the fastest and easiest ways to check for duress is to see if proper consideration was given.
When duress is applied in a situation, one party will benefit but the other party will only receive that which was originally promised. A promise to do what a person was already legally bound to do is not consideration. Note that this does not automatically mean that duress was applied, but the fact that only party was enriched from the modified agreement is highly suspicious. However, if both parties benefit, then consideration exists, which makes it unlikely that duress was a factor.
For example, suppose that party A agrees to mow B’s lawn in exchange for $100. However, A decides that he wants $200 for the job instead. If A and B renegotiate the agreement terms, A gets $200 in exchange for A mowing B’s lawn and doing B’s homework, then there is consideration and thus a valid contract. Suppose though, that A refuses to mow B’s lawn until B gives A $200 instead of the initially agreed $100. This alone would not necessarily establish duress, but a court would certainly look into the circumstances more.
To prove duress in contracts setting, a party must show:
- A continuous, legal contract exists between the plaintiff and the defendant;
- The defendant threatens to terminate the pre existing contract; and
- The plaintiff, while under this duress, then accepts the terms of the contract and enters the contract solely because of it.
Often, it is difficult to tell if duress is being applied. Courts examine other factors to determine if undue pressure is being exerted on one party by another, including:
- The timeframe for completion of contract performance for each party;
- The bargaining power of both sides at the time the agreement was made;
- The parties’ mental states at the time the agreement was formed or made;
- Whether the parties involved believed that the agreement was fair at the time the agreement was made;
- Whether there were reasonable alternatives to the creation or modification of the contract at the time the agreement was made; and
- Whether ordinary legal remedies (i.e. suing for breach of contract) were a reasonable solution to the problem. If a party feels they don’t have to time to conduct a lawsuit, they may be induced into make a bad bargain.
As can be seen, asserting the defense of duress can sometimes be a complicated task to accomplish. Thus, if you are in a situation where you are being sued for breaching a contract that you made under conditions you think constitute duress, you should immediately seek the counsel of a knowledgeable and well-qualified business attorney to learn more about your rights, possible defenses, and how to properly assert the defense of duress.
Additionally, if you committed a crime under duress, you should immediately contact an experienced criminal defense attorney to represent you, and ensure that the defense is properly asserted, in order to avoid or lessen any criminal punishment.