Full question:
Would the following circumstances be legal reason enough to consider a contract void?1. Company 'A' was forced to agree to the terms of the contract under duress. ( a contract we were extorted into giving up our promised discount AND where we agreed to pay them 1% per day if our payment was late which was ridiculous) That duress being: A) Company 'B' International was holding critical pieces to hundreds of sets that already been paid for by Company 'A'. They shipped the items in a way which witheld 1 piece from every set and placed those pieces in the last containers to arrive so that we could not cancel any part of the order since they were already 2 months late with delivery and we had asked for a refund, which was refused. This was a breach of initial our agreement in the first place as Company 'B' promised to only deliver complete sets. B) Company 'A' was already responsible for paying the demurrage of 35,000 whether or not Company 'B' released the goods and that amount was climbing by more than 1300.00 per day. C) The entire situation is based on 4 previous failed contracts wherein Company 'B' failed to deliver the goods on time resulting in massive financial damage to Company 'A'. Company 'B' then failed to give Company 'A' the discount they had promised in previous contracts and the arguing cost Company 'A' nearly 80,000. (2. Company 'B' failed their obligations of the contract by refusing to release the goods as promised on September 10th. A) Instead of releasing as promised, Company 'B' tried to extort Company 'A' into paying 20-30 thousand more than owed during the interim. B) Company 'B' lied several times about releasing the good, then stated they were not releasing the goods unless Company 'A' paid more money than agreed.C) The goods were not released until Company 'A' contacted Company 'B''s bank and sent them copies of all contracts and emails showing Company 'B''s intentions not to release the goods.3.The goods according to the original contract have still not been delivered. Only 1/2 of the items were made as requested. A) The sets were not made as ordered and in some cases are defective.B) The items were sent in non ordered and non matching colors so the items could not be solds as sets as was intended.C) There are missing components to the sets.Company 'A' entered into the contract in good faith, however, unfortunately Company 'B' did not and they further damaged their trustability with us. The promise of future business was diminished with the ongoing attempts at extortion for more money, this after causing Company 'A' to lose $100,000 in business.
- Category: Contracts
- Subcategory: Recission
- Date:
- State: Nevada
Answer:
The answer is a matter of subjective determination for the court, based on all the facts and circumstances involved. Duress is defined as the constraint of another’s will so that he is forced to give consent when he is not in reality willing to do so. Duress must destroy the free will of a party and cause him to do an act or form a contract not of his own volition. The alleged coercive event must be of such severity, either threatened, impending, or actually afflicted, so as to overcome the mind and will of a person of ordinary firmness. Duress is viewed with a subjective test, looking at the individual characteristics of the person allegedly influenced, and duress does not occur if the person has a reasonable alternative to succumbing and fails to avail themselves of the alternative.
“Duress of goods” refers to unlawfully seizing or withholding property, or threatening to do so, until some demand is met. The more modern concept is called "economic duress." The elements of economic duress include the following:
-Wrongful or improper threat: The precise definition what is wrongful or improper is judged by the facts in each case. Examples include: morally wrong, criminal, or tortuous conduct; a threat to breach a contract "in bad faith" or threaten to withhold an admitted debt "in bad faith".
-Lack of reasonable alternative. If there is an available legal remedy, an available market substitute (in the form of funds, goods, or services), or any other source of funds, this element is not met.
-The threat is the actual cause of entering into the contract. This is a subjective standard, and takes into account the victim's age, their background (ex. business sophistication, education), relationship of the parties, and the ability to obtain advice.
-The other party caused the financial distress. The majority opinion is that the other party must have caused the distress, while the minority opinion allows them to merely take advantage of the distress.
This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.
