When determining if threat is credible the age sex

● When determining if threat is credible - “The age, sex, capacity,
relation of the parties and all the attendant circumstances must be
considered.”
Austin Instrument, Inc. v. Loral Corp : P seeks to recover price difference
on grounds of economic duress. P had contracts with the US Navy to
produce radar sets and L agreed to subcontract certain parts, then D told
P that they would have to raise the price or D would stop delivery. P
acceded to D’s demands b/c it could not find the parts from anyone else.
● Economic Duress: A wrongful threat that precludes free will.
Proof: 1) immediate possession of needful goods is threatened (threat
to breach) 2) unable to obtain goods elsewhere.
● Threat to stop delivery = wrongful threat, precluding exercise of free
will
● P x want to jeopardize relationship w/ gov., adequate under these
circumstances to agree and seek recovery later.
● P had no other means to obtain materials needed.
● Re. 175 - contract is voidable, P recovers difference.
Machinery Hauling, Inc. v. Steel of West Virginia : P contracted with D to
purchase steel and have it delivered to a third party. D told P the steel
was unmerchantable and the third party rejected it and directed P to
return the last three loads to D. D told P that if it did not pay $31K it
would cease doing business with P with a potential loss of over $1M/yr.
● This was NOT duress b/c the demand was not coupled with threat of
termination or an existing contract
● P didn’t give into the demands = x overbear their free will = no ED
● The claim of loss future business is not viable for economic duress,
future expectancy isn’t a legal right to claim duress.
● Re. 176(2) - this case doesn’t meet the improper threat test.
Williams v. Walker Thomas Furniture Co. : P bought several things from D
through installment plans. D then repossessed all items for payment
default by a clause that claimed D still had title to all items until balance
is completely eliminated. P appealed claiming (1) Mutual
Misunderstanding (2) contracts were against public policy.
● Re claim (1): it was P’s fault for not reading the contracts, she assumed
the risk.
● Re claim (2): Although D knew P had limited resources, and it may
have been morally irresponsible to sell her expensive items, it’s not
against the law by means of fraud or misrepresentation, or public
policy.
On Appeal:
● Applies the newly passed UCC 2-302 - unconscionability - an absence
of meaningful choice on the part of one of the parties (determined by
considering all circumstances surrounding the transaction) together
with contract terms which are unreasonably favorable to the other
party (unduly harsh terms)
● The presence of a meaningful choice is Many times meaning choice is
negated by gross inequality of bargaining power - Did both parties
have a reasonable opportunity to understand the contract?