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Learn about the legal grounds for invalidating contracts on the basis of duress and undue influence, exploring the impact of threats, economic duress, and improper persuasion tactics on contract enforceability.
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Contracts Fall 2008 Class 21
Equitable Grounds not to enforce a contract • A.1: problems with the Parties: • minority and incapacity • A. 2.a Problems with the Process • Duress and Undue Influence • Misrepresentation
Duress • Old rule: Threat to person • New Rule • Economic duress suffices • Wrongful (some courts: illegal) threat by person imposing duress • Many courts: circumstances giving rise to duress caused by person making the threat • No reasonable alternative • contract actually induced by threat
Duress • Threat to person: K is void. • Economic duress: K is voidable
Undue Influence: some factors • Discussion of transaction at unusual or inappropriate time • Consummation of transaction in unusual place • Insistent demands that the business be finished at once • Extreme emphasis on untoward consequences of delay
Undue Influence: Some Factors • The use of multiple persuaders by the dominant side against a single servient party • Absence of third-party advisors to servient party • Statements that there is no time to consult financial advisers or attorneys