Duress exists where: (1) one party involuntarily accepts the terms of another, (2) circumstances permit no other alternative, and (3) such circumstances are the result of coercive acts of the other party. The third element is further explained as follows: In order to substantiate the allegation of economic duress or business compulsion, the plaintiff must go beyond the mere showing of reluctance to accept and of financial embarrassment. There must be a showing of acts on the part of the defendant which produced these two factors. The assertion of duress must be proven by evidence that the duress resulted from defendant's wrongful and oppressive conduct and not by the plaintiff's necessities.
A contractor hired the transporter to move construction materials by sea. Numerous problems impeded performance of the contract, and the contractor terminated the contract. The parties settled for a portion of the invoice. The transporter argued that the settlement should be avoided on the grounds of economic duress. At trial, the trial court granted summary judgment in favor of contractor and denied the transporter's motion to formally publish a witness' deposition after summary judgment was entered because the parties had referred to the deposition in their memoranda and arguments. The case was appealed to the Supreme Court of Alaska.
Was the granting of summary judgment proper?
The Court held that summary judgment was not properly granted because the transporter made a sufficient factual showing to withstand the motion for summary judgment as to each of the elements of economic duress by showing that it was the victim of a wrongful threat, and the threat deprived it of its unfettered will.