Brief Fact Summary.
Headley (Plaintiff) sued Hackley & McGordon (Defendants) to recover compensation for cutting, hauling and delivering a quantity of logs in the Muskegon river. The Plaintiff accepted a note for $4,000 and signed a receipt, but claimed that he did so under duress.
Synopsis of Rule of Law.
Duress exists when one by the unlawful act of another is induced to make a contract or perform some act under circumstances which deprive him of free will.
But this would be a most dangerous, as well as a most unequal doctrine; and if accepted, no one could well know when he would be safe in dealing on the ordinary terms of negotiation with a party who professed to be in great need.View Full Point of Law
The parties had a written contract, but disagreed as to the terms. The Plaintiff went to the Defendants and demanded $6,200, what he estimated he was owed under the contract. The Defendants disagreed, claiming that they only owed $4,260, and offered the Plaintiff a note for $4,000. The Plaintiff said that wasn’t enough, and Defendants said he could sue for the rest. The Plaintiff could not afford to sue and needed the money, so he accepted the $4,000 and signed a receipt discharging the Defendants from any further liability.
The question of duress remained for this court to decide.
Was the receipt obtained by duress?
Yes. Reversed and remanded.
· The Defendant was not responsible for Plaintiff’s financial situation, and did nothing to make it so important to him to be paid immediately.
The Plaintiff’s claim of duress was founded solely on his own personal need for money, so the same action by the Defendant would not have constituted duress if Plaintiff was not in financial need. A claim for duress cannot be founded solely on a plaintiff’s necessity.
Where the party threatens nothing which he has not a legal right to perform, there is no duress. In this case, the Defendant did nothing to put the Plaintiff in the situation he was in financially, and merely offering a note for a lesser amount than the Plaintiff claimed he was owed was not duress.