Overreaching

Question 1

Define: Duress in Contracting

Answer 1

Impermissible pressure exerted by one party over another either during pre-contractual bargaining, or, as is often the case, during the attempted renegotiation of an existing deal.
Removes one party’s ability to mutually assent to a contract.

Question 2

What is the rule from RS 176 about when a threat is improper?

Answer 2

It is not duress to threaten to do what one party has the legal right to do.
RS 176: When a threat is improper?
(a) when what is threatened is a crime or tort
(b) What is threatened is a criminal prosecution
(c) The threat is made in bad faith
(d) The threat is a breach of dealing in good faith and fair dealing

Question 3

Overreaching

RS 174: When there is no willingness to enter into a bargain

Answer 3

If conduct that appears to be a manifestation of assent by a party who does not intend to engage in that conduct is physically compelled by duress, the conduct is not effective as a manifestation of assent.

Question 4

Overreaching

RS 175: When duress by threat makes contract voidable

Answer 4

(1) If a party’s manifestation of assent is induced by an improper threat by the other party that leaves the victim no reasonable alternative, the contract is voidable by the victim.
(2) If a party’s manifestation of assent is induced by one who is not a party to the transaction, the contract is voidable by the victim unless the other party to the transaction acts in good faith and without reason to know of the duress either gives value or relies materially on the transaction.

Question 5

Duress in Business

When is a contract voidable under Duress in Business?

Answer 5

Contract is voidable on grounds of duress when the party making the claim was forced to agree to it by means of a threat, and does not allow the party to use their free will..

Question 6

Duress in Business

What is required for a claim of Duress?

Answer 6

1) a wrongful threat
2) Must have no other possible option
3) An ordinary remedy is not possible. Example: cannot take them to court because of time constraints

Question 7

Undue Influence

RS 177: When undue influence makes a contract voidable

Answer 7

(1) Undue influence is UNFAIR PERSUASION of a party who is under the DOMINATION of the person exercising the persuasion or when someone knows that the person will not act in relation to their own welfare.
(2) If a party’s manifestation of assent is induced by undue influence by the other party, then the contract is voidable by the victim.
(3) If a party’s manifestation of assent is induced by one who is not a party to the transaction, the contract is voidable by the victim unless the other party to the transaction in good faith and without reason to know of the undue influence either gives value to or relies on the transaction .

Question 8

What are the elements of undue influence?

Answer 8

1) Inappropriate timing,
2) Unusual placement of discussion
3) Insistent demand that business be finished at once,
4) Discussion of what happens if they don’t finish business right away
5) Multiple persuaders against one party
6) Insisting that they do not need any outside assistance, such as a lawyer.

Question 9

What is the difference between duress and undue influence?

Answer 9

Duress often contained a threat and undue influence uses a power position to coerce.

Question 10

Duress vs. Undue influence

Answer 10

Duress: an improper threat

Undue Influence: Persuasion overpowering that it overtakes the other parties willpower. Dominant vs subservient