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Law School Case Brief

Machinery Hauling v. Steel of W. Va. (1989) - 181 W. Va. 694, 384 S.E.2d 139 (1989)

Rule:

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. A more difficult issue is determining what type of threat is sufficient to invoke the rule. Courts tend to use as a shorthand summary, words such as "wrongful," "oppressive," or "unconscionable" to describe conduct. The concept of economic or business duress may be generally stated as follows: Where the plaintiff is forced into a transaction as a result of unlawful threats or wrongful, oppressive, or unconscionable conduct on the part of the defendant that leaves the plaintiff no reasonable alternative but to acquiesce, the plaintiff may void the transaction and recover any economic loss.

Facts:

Plaintiff carrier brought an action against defendant manufacturer seeking money damages for the manufacturer's extortionate demands. The Cabell County Circuit Court (West Virginia) certified questions concerning the effect of threats made by one party for the purpose of inducing contract concessions from the other. A buyer refused to accept defective goods made by the manufacturer and shipped by the carrier. The manufacturer told the carrier that if the carrier did not pay the manufacturer the price of the undelivered goods, the manufacturer would cease to do business with the carrier. The carrier brought an action against the manufacturer seeking monetary damages for the manufacturer's extortionate demands. The trial court certified questions concerning the effects of threats made by one party for the purpose of inducing contract concessions from another. 

Issue:

Was the manufacturer's threat to the carrier an actionable business or economic duress?

Answer:

No

Conclusion:

The court held that (1) the concept of business or economic duress did not exist in the case, (2) there was no continuing contract between the manufacturer and the carrier; thus, the demand by the manufacturer that the carrier pay for the defective goods was not coupled with a threat to terminate an existing contract, (3) the carrier did not accede to the manufacturer's demand to pay over the money. there appears to be general acknowledgement that  duress is not shown because one party to the contract has driven a hard bargain or that market or other conditions now make the contract more difficult to perform by one of the parties or that financial circumstances may have caused one party to make concessions.

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