Vices of Consent - Duress Flashcards
Nature of Duress and Elements
(b) Nature—“Consent is vitiated when it has been obtained by duress of such a nature as to cause a reasonable fear of unjust and considerable injury to a party’s person, property, or reputation. Age, health, disposition, and other personal circumstances of a party must be taken into account in determining reasonableness of the fear.” (La. Civ. Code art. 1959)
(ii) Elements—The nature of duress that vitiates consists of two elements: an objective element and a subjective element.
a. Objective Element—In what way does La. Civ. Code art. 1959 set forth an objective standard for duress? What is meant by “reasonable” fear? What is meant by “unjust” injury?” See La. Civ. Code art. 1962 for elaboration of this point (“A threat of doing a lawful act or a threat of exercising a right does not constitute duress. A threat of doing an act that is lawful in appearance only may constitute duress.”) What is meant by “considerable” injury?
- Must take a look at whether or not a reasonable person would have been afraid, if the action is sufficiently severe to cause the reasonable person to be afraid. However, the CC does give a nod to the specific characteristics of the contracting party and notes that certain characteristics of the person must be taken into account. Age, health, etc.
b. Subjective Element—In what was does La. Civ. Code art. 1959 set forth a subjective standard for duress?
c. Illustration—A woman, A, dies and leaves her niece, B, her entire estate in her last will and testament. B is in her 60s, had little formal education, and is barely literate. B, who had no children and whose parents both died very young, is devastated by the loss of her aunt. A’s own children are angry that their mother gave her estate to B. They threaten to sue B and challenge the validity of the will, unless she agrees to give them a sizeable chunk of the estate. Does this threat rise to the level of duress?
- The court did not rescind in this case because of Art. 1962. A threat of doing a lawful act or a threat of exercising a right does not constitute duress. However, a threat of doing an act that is only lawful in appearance MAY constitute duress.
c. Couder v. Oterti, 34 La. Ann. 694 (1882)—Oteri threatened to kill Couder unless Couder executed a $3,000 mortgage in his favor. Can this contract be rescinded on grounds of duress? Why or why not?
- Otieri wants to rescind those mortgage contracts based upon duress. The court finds that though duress may have been exercised at one point, the duress was not operable at the time of suit.
- The court determined that the threats of violence made by Mr. Orteri had
no connection to the execution of the mortgage notes. The threats made by Mr. Orteri
were never followed by any acts showing his willing to carry out his threats. To the
contrary, Mr. Orteri’s attorney sent Mr. Couder a letter threatening legal action as
opposed to violent action against Mr. Counder. The degree of violence or the
character of the threats, which in law vitiates a contract, must be considered and
weighed in reference to men of ordinary composure and nerve, not in the scales of
imaginative alarmists. There was no duress to rescind the contract.
Duress Distinguished from Adverse Circumstances
(c) Duress Distinguished from Adverse Circumstances— Does “duress” require an individual actor or actors, or can general circumstances give rise to duress? Consider whether adverse circumstances, such as economic pressure or emotional/mental pressure, meets the definition of duress set forth in La. Civ. Code art. 1959.
(i) Wilson v. Aetna Cas. & Surety Co., 228 So. 2d 229 (La. App. 3 Cir. 1969)—Wilson entered into a compromise with the liability insurer of a motorist who struck him. What were the circumstances surrounding the making of this compromise? Was it procured through duress? Why or why not?
- Case where a man was injured in a trucking accident, and while in hospital signs a lease relasing the other party of liability for 500. Tries to rescind because he claims he was in such dire circumstances.
- Court says he cannot rescind because the type of duress is not the type contemplated by the code, that actionable duress is caused by exterior threats to another party, not by the financial duress caused by themselves.
(ii) Adams v. Asams, 503 So. 2d 1052 (La. App. 2 Cir. 1987)—Mrs. Adams signed a community property settlement, which she now seeks to rescind. What were the circumstances surrounding the making of this compromise? Was it procured through duress? Why or why not?
- Wife argues that since her financial situation is so fragile she had no choice but to accept community property agreement. Court does not agree with this argument.
(iii) Jordan v. City of Baton Rouge, 529 So. 2d 412 (La. App. 4 Cir. 1988)—Jordan got arrested and his car was impounded. He signed a release absolving the police department of any liability for damage to his car. What were the circumstances surrounding the making of this agreement? Was it procured through duress? Why or why not?
- The only way Jordan was able to get his car back was to sign something rescinding all liability of the police department. Court actually allows him to rescind based upon duress, and this case is hard to square. Probably partially a policy decision not allowing the police department to get away with this.
- This is almost never actionable.
Parties by whom and against whom duress is exerted
Parties By Whom and Against Whom Duress is Exerted
(a) Duress Directed at Third Persons—“Duress vitiates consent also when the threatened injury is directed against the spouse, an ascendant, or descendant of the contracting party. If the threatened injury is directed at other persons, the granting of relief is left to the discretion of the court.” (La. Civ. Code art. 1960) - Recognizes that duress vitiates consent if threats are directed against a spouse or descendant. Court will look at relationship between the persons. (b) Duress Perpetrated by Third Person—“Consent is vitiated even when duress has been exerted by a third person.” (La. Civ. Code art. 1961) - Threatening someone with a gun to sell their house to someone else will vitiate consent. This consent is vitiated even if the other contracting party had no idea that the duress had occurred.
Exception: Contract with Third Party in Good Faith
Exception—Contract with Third Party in Good Faith—“A contract made with a third person to secure the means of preventing threatened injury may not be rescinded for duress if that person is in good faith and not in collusion with the party exerting duress.” (La. Civ. Code art. 1963).
This rule has never been applied by a court. Sometimes called the ransom rule.
(a) Illustration—A kidnaps B’s child, C. A threatens to kill C unless B pays A $50,000. A then goes to D and asks for a $50,000 loan. Is the loan enforceable? Could A later rescind the loan with D on the basis of duress?
- The load would be enforceable if D is in good faith and is not in collusion with A.
Remedies
Recission of Contract, Damages and Attorney’s fees
