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Breach, Remedies, and Defenses

Duress in Entering a Contract

Duress is coercion applied to enter into a contract, usually through a wrongful or unlawful threatened act or acts. Duress means the coerced party can void the contract.

When a party to a contract claims he or she signed the contract after being threatened or coerced, the situation is known as duress. Duress does not only apply when there are threats of bodily injury or harm. It can also apply when there is a threat of damage to property or goods. For duress to apply, the person must basically have no choice but to comply with the demand.

For example, suppose Bethany owns a shoe store. One day, someone comes into her store and tells her that if she doesn't start buying shoes from his friend Jimmy, a supplier, he is going to make her life "very difficult." He urges her, "Watch your back." Fearing for her safety and well-being, Bethany buys from Jimmy, although his shoes are double the price she used to pay. In this case, Bethany might have a viable claim for duress. She would not have agreed to buy the shoes from Jimmy had she not been threatened and forced to worry about her safety and well-being.

In this example, if Bethany successfully argued that the contract was entered into by way of duress, a court could rule that the contract is void. She would probably be permitted to negate the contract, pursue damages, or both.

In cases of duress, there is sometimes a question of how much pressure has to be exerted by someone and whether an individual's belief that they have no choice but to act is legitimate or reasonable.