Define: Economic Duress

Economic duress refers to a situation where one party exerts undue pressure on another party to enter into a contract or make a decision due to financial constraints or threats.

Examples of economic duress include threatening to terminate employment, withholding payment, or refusing to fulfill contractual obligations unless the other party agrees to certain terms.

Yes, economic duress is generally considered illegal as it undermines the principle of free and voluntary consent in contract law.

To prove economic duress, the following elements must typically be established: (1) a threat or pressure that is illegitimate or wrongful, (2) the threat must have induced the party to enter into the contract or make a decision, and (3) the party had no reasonable alternative but to succumb to the pressure.

Yes, economic duress can be used as a defence in a contract dispute. If a party can prove that they entered into a contract under economic duress, the contract may be deemed voidable.

Victims of economic duress may seek remedies such as rescission of the contract, damages for any losses suffered, or specific performance if the contract cannot be rescinded.

Yes, economic duress can occur in business transactions. It is not limited to personal or individual contracts but can also be present in commercial dealings.

To protect themselves from economic duress, individuals and businesses should ensure that contracts are entered into voluntarily and without any undue pressure. Seeking legal advice before signing any agreement can also help identify potential issues.

Yes, economic duress can be proven without direct evidence. Circumstantial evidence, such as the timing of threats or pressure, the financial vulnerability of the victim, and any sudden changes in the terms of the contract, can be used to establish a case of economic duress.

Yes, there are legal defences against allegations of economic duress. For example, if the party claiming economic duress had a reasonable alternative course of action available to them, it may weaken their case. Additionally, if the alleged duress was not wrongful or illegitimate, it may also serve as a defence.