In a forced defense, the party admits to having committed an act, but unintentionally. Although the act is illegal, it was committed under pressure or extreme threat to cause bodily harm or even death. A party cannot be found guilty of committing an unlawful act if he was convinced that he would suffer bodily harm if he did not participate in the act. The role of the government is then to prove that the defendant threatened to cause harm to the plaintiff if the plaintiff did not enter into the contract, which is the result of significant trade and price negotiations. Essentially, it sets out the agreed elements of the agreement, includes a number of important safeguards for all parties involved, and provides the legal framework to complete the sale of a property. The general doctrine of coercion provides for an unlawful act of a party by which its consent is obtained through fear or threat. Keithley v. Civil Service Vol. (1970) 11 Cal.
App.3d 443, 450 (internal quotation marks omitted). As defined in California Civil Code Section 1569: The Supreme Court`s decision means that it will be very difficult to apply legal coercion in commercial transactions unless there is clear evidence of morally reprehensible behavior. It will not apply, for example, simply because one party has a much stronger negotiating position than the other. It also does not apply (according to the majority of the Supreme Court) if a party with much stronger bargaining power derives payment from a bad faith claim from a pre-existing legal claim that it knows/believes to be false. A party who fears for his safety may exercise coercion. One example would be the threat to harm a person`s family if they refuse to sign a contract. If an illegal or threatened act of activity takes place, this is considered coercion. Although it stems from a lawsuit in Alaska, California courts often refer to Totem Marine T. & B v. Alyeska Pipeline, Etc. (Alaska 1978) 584 P.2d 15.21 when it comes to the doctrine of economic hardship.
Totem, a new company, commissioned Alyeska to transport pipeline construction materials from Houston, Texas, to a southern Alaskan port, with the possibility of one or two freight stops along the way. Totem has chartered the equipment necessary for the execution of the contract. Unfortunately, from the beginning, many unforeseen problems occurred that hindered Totem`s performance. When Totem`s tugs and chartered barges arrived at the port of Long Beach, California, Alyeska ordered the unloading of the barge and unilaterally terminated the contract. Totem then filed cancellation invoices totalling between $260,000 and $300,000. At the same time, Totem told Alyeska that she desperately needed money to pay her creditors and that she would go bankrupt without immediate payment. After some negotiations, Alyeska offered to settle Totem`s account for $97,500. To avoid bankruptcy, Totem accepted Alyeska`s compromise offer and signed an agreement that exempted Alyeska from any claims under the contract. About four months after the signing of the release agreement, Totem sued Alyeska for the remaining amount of the contract. The Court of First Instance issued a summary judgment in favour of Alyeska on the basis of the dismissal agreement.
The Alaska Supreme Court overturned this decision and relied almost exclusively on the doctrine of economic hardliners. Proof of coercion in a contract requires three things: consideration is what is meant by negotiation and exchange of goods and services. This is vital, and without it, there is no contract. If one party benefits, but the other only receives what was originally promised, that is coercion. Although there is an economic coercion of the “legal act” in English law, its room for manoeuvre in contractual negotiations is “extremely limited”. To terminate a contract under legal duress, the defendant must have exerted unlawful pressure on a party to induce it to enter into a contract. Bad faith is no longer enough to trigger economic coercion. There must be something more morally reprehensible. The commercial pressure exerted by the big airline on a small ticket agent, however “hard” it may be, was not illegitimate and its agreement was therefore not questionable: Pakistan International Airline Corp v Times Travel (UK) Ltd [2021] UKSC 4 Here are the two main categories of coercion: The “illegal acts” provided for by the doctrine can take the form of a threat of bad faith, Initiate civil proceedings, extortion, assertion of a claim known to be false or a threat in bad faith to break a contract or withhold payment Crosstalk Productions Inc.c. Jacobson (1998) 65 Cal. App. 4th 631, 644-645.
However, it has long been recognized that taking legal action or threatening such measures cannot constitute such coercion. Louisville Title Ins. Co.c. Title of surety & Guar. Co. (1976) 60 Cal. App.3d 781, 801; See also Leeper v. Beltrami (1959) 53 Cal.2d 195 , 204; Taylor vs.
Ford (1901) 131 Kal. 440, 447. Similarly, the courts have concluded that opposing views on contractual rights are not coercive. As in River Bank America v. Diller, “[i]t is not a constraint. to have a different, albeit erroneous, view of contractual rights than that of the other party to the contract, and it is not a constraint to refuse in good faith to proceed with a contract, even if such a refusal could later prove to be erroneous. The mere threat of refusing legal action for which a person has an appropriate remedy is not coercion. River Bank America vs Diller (1995) 38 Cal.App.4th 1400, 1424-1425.
The court ruled that illegitimate pressure is closely linked to the correct concept of lack of scruples. Morally reprehensible conduct that renders a contract unenforceable in court (according to the just concept of unscrupulous business) would constitute illegitimate pressure in the context of economic coercion. Coercion on goods occurs when one party detains the goods of another party until the party enters into an illegal contract. This leaves the party with no choice but to give in to coercion. This was demonstrated in Hawker Pacific Ltd vs Helicopter Charter Pty Ltd (1991) when Hawker Pacific detained a Helicopter Charter helicopter until it made further payments to repair a botched livery. The court annulled the contract on the grounds that it had been concluded under duress. There is no absolute test to distinguish illegitimate pressure from hard and plummeting pressure from normal trade negotiations. It is generally accepted that a breach of contract (past or threatened) or the threat to commit an illegal act, crime or misdemeanour may constitute prima facie illegitimate pressure. Whether the particular threat or pressure actually amounts to illegitimate economic pressure is very contextual and case-specific.
Historically, in contract law, the assertion that a contract was questionable on grounds of coercion could only be successful if a threat to the person (i.e., physical coercion) had triggered the contract. Now, however, a contract can be questionable for economic reasons. The essential elements are that an unlawful threat has been made (e.B to breach an existing contract or commit a crime) and that the injured party has no practical choice but to consent to the conditions set by the person who made the threat. In contract law, the consideration must only be sufficient rather than appropriate. In this context, the value of the consideration is appropriate in view of the economic value of the transaction. However, this does not mean that the validity of the recital is affected. From a legal point of view, the only requirement is that the consideration has a minimum economic value. The doctrine of economic coercion has also been applied in the context of family law.
In re Marriage of Baltins (1989) 212Cal. App.3d 66, is an excellent example of the application of doctrine in the family law community. The husband drafted a marital settlement agreement that gave his wife only 10 to 15 per cent of the property of the conjugal community. The wife only signed the agreement after the husband threatened to declare bankruptcy and avoid payment to the wife (or daughter) if she did not sign immediately. Although the wife was represented by a lawyer, the lawyer was not consulted on the settlement agreement (as the husband told her he would not negotiate with the lawyers) and the woman was clearly desperate, desperate and had difficulty coping with it. The court noted that “perhaps the most significant sign [evidence of coercion] is the wife`s consent to a manifestly unjust agreement whereby she received only 10-15% of the community`s property and insufficient support for herself and the minor child. The evidence shows no consideration for such an unequal agreement. Thus, the court applied the doctrine of economic hardship, and the wife was entitled to a change in the judgment on the dissolution of the marriage […].