Duress: Overview, definition and example
What is duress?
Duress happens when someone is forced or pressured into signing a contract or agreeing to something against their free will. This pressure could involve threats, physical harm, or other forms of coercion. If a contract is signed under duress, it may not be legally enforceable because the person wasn’t truly acting voluntarily.
For example, if a business owner is threatened with harm unless they sign a contract, that contract would likely be invalid due to duress.
Why is duress important?
Duress is important because it ensures that contracts are entered into willingly and fairly. The law protects parties from being forced into agreements through intimidation or threats. Identifying duress helps ensure that all agreements are valid and legally binding.
In business, understanding duress is crucial to avoid disputes and protect against unethical practices. If one party can prove they signed under duress, the contract may be canceled or voided.
Understanding duress through an example
Imagine a supplier pressures a retailer into signing a long-term purchase agreement by threatening to stop all deliveries immediately if they don’t comply. If the retailer agrees out of fear of losing critical inventory, they may later argue that the agreement was made under duress and should be invalidated.
In another case, a business partner threatens to disclose false damaging information about another partner unless they agree to unfavorable terms in a contract. This kind of coercion would also constitute duress, making the agreement legally questionable.
An example of a duress clause
Here’s how a clause addressing duress might look in a contract:
“The Parties affirm that they are entering into this Agreement voluntarily, without coercion, undue influence, or duress. Any claims of duress shall be subject to dispute resolution procedures outlined herein.”
Conclusion
Duress refers to situations where someone is forced into an agreement through threats or coercion, making the contract potentially invalid. It’s a critical concept that ensures fairness and free will in legal and business relationships.
By understanding duress and ensuring contracts are signed voluntarily, businesses can protect themselves from unethical practices and maintain trust in their dealings. It’s about safeguarding the integrity of agreements and ensuring all parties act freely and fairly.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.