WPI 301.10 Enforceability—Duress

Use this instruction when a party seeks to avoid enforcement of a contract on the basis of duress that does not involve physical force. If physical compulsion is claimed, see the Comment below.

If an issue of ratification by subsequent conduct is raised, or if duress is applied by a third party, the instruction should be modified accordingly. See the Comment below.

Include the last sentence, if applicable.

Use this instruction with the second paragraph of WPI 160.03 (Fraud—Burden of Proof—Combined With Preponderance of Evidence).

Background. This instruction is based generally on the Restatement (Second) of Contracts §§ 175–76 (1981).

Threat versus physical compulsion. Duress and undue influence both involve improper pressure during the bargaining process, which may form the basis for the pressured party to rescind or avoid enforcement of the contract. Cf. WPI 301.11 (Enforceability—Undue Influence). In the extreme, and relatively rare, case of physical compulsion of the conduct expressing assent to the contract, no contract is formed. See Restatement (Second) of Contracts § 174 (1981). In the more common instance of compulsion resulting from an improper threat, duress will render a contract voidable by the victim. Restatement (Second) of Contracts § 175 (1981).

Improper threats. According to the Restatement (Second) of Contracts § 176(1) (1981), a threat is improper if:

A threat is also improper under section 176 (2) if the resulting exchange is not on fair terms and

This list broadens the formulation of the first Restatement, in which the primary focus was on whether a wrongful act compelled assent “without volition” or without the victim “exercising free will and judgment.” Restatement (First) of Contracts § 492 (1932), as quoted in Pleuss v. City of Seattle, 8 Wn.App. 133, 137, 504 P.2d 1191 (1972); see, e.g., In re J.N., 123 Wn.App. 564, 95 P.3d 414 (2004) (adoption agreement was not a result of duress); In re Marriage of Wilson, 117 Wn.App. 40, 68 P.3d 1121 (2003) (trial court's rejection of duress was justified by evidence that parties were educated and represented by counsel); Matthews v. Wenatchee Heights Water Co., 92 Wn.App. 541, 963 P.2d 958 (1998) (reluctance or fear of financial embarrassment insufficient to establish duress).

As noted in comment b to section 175, the Restatement (Second) of Contracts has substituted the concept of “no reasonable alternative” for the former emphasis on lack of free will or volition. While Washington courts have not so far explicitly adopted the newer approach, in the related area of “undue influence,” the courts have followed the Restatement (Second) of Contracts in abandoning an “overcoming the will” analysis. Gerimonte v. Case, 42 Wn.App. 611, 615, 712 P.2d 876 (1986).

Legal right exercised in good faith. Many Washington cases hold that a “mere threat to exercise a legal right made in good faith” does not constitute duress. Pleuss, 8 Wn.App. at 137. This includes a threat of litigation. Red-Samm Mining Co., Inc. v. Port of Seattle, 8 Wn.App. 610, 508 P.2d 175 (1973). Such a threat is made in good faith “if made in the honest belief that valid grounds exist to justify the action threatened.” Pleuss, 8 Wn.App. at 137; see Doernbecher v. Mutual Life Ins. Co. of New York, 16 Wn.2d 64, 132 P.2d 751 (1943).

Economic duress. In cases applying the first Restatement of Contracts section 492, Washington courts have held that to prove economic duress, or “business compulsion,” the threat must involve serious business loss in a situation so immediate as to render resolution in court impractical, and the victim must prove that both the immediate pressure and the underlying vulnerability of the victim to such pressure were attributable to the offending party. Nord v. Eastside Ass'n Ltd., 34 Wn.App. 796, 798, 664 P.2d 4 (1983); Barker v. Walter Hogan Enterprises, Inc., 23 Wn.App. 450, 453, 596 P.2d 1359 (1979). Fear of financial embarrassment is insufficient to establish duress. Matthews, 92 Wn.App. at 554.

Third parties. The Restatement (Second) of Contracts section 175(2) provides that a contract may be voidable by a victim of duress applied by someone who is not a party to the transaction, but only if the other party to the transaction has not, in good faith and without reason to know of the duress, given value or materially relied on the contract. Restatement (Second) of Contracts § 175(2) (1981)

Ratification. Because duress renders a contract merely voidable, rather than void, subsequent conduct of the victim that ratifies the contract renders it no longer voidable. W. Wash. Cement Masons Health & Sec. Trust Funds v. Hillis Homes, Inc., 26 Wn.App. 224, 234, 612 P.2d 436 (1980).

Burden of proof. The burden of proof for a party seeking to rescind a contract due to duress is clear, cogent, and convincing evidence. In re J.N., 123 Wn.App. at 576–77.