united-states contract-law civil-law new-jersey
Economic Duress Induced Illegally Makes a Contract Void or Voidable?
<p><a href="https://law.stackexchange.com/a/48892/36096">This answer</a> explains the difference between a void and voidable contract:</p>
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<p>Void means it never happened</p>
</blockquote>
<blockquote>
<p>Voidable means someone has the right to declare it void (q.v.)</p>
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<p>If a contract was signed due to illegal economic duress, I understand the contract can be voided. But is it automatically void or is it voidable by the victim if they choose? Can the victim choose to enforce the contract if s/he so wishes?</p>
<p>What if the victim only wants to enforce certain parts of the contract (assume the contract contains a clause stating that if one clause is unenforceable it shall shall not prevent other clauses from being enforced)? Does the victim have the option to enforce specific parts?</p>
<p><strong>Update</strong>:</p>
<p>By illegal economic duress I mean duress that was not induced simply due to one side having better bargaining power but duress that was induced in violation of the law.</p>

<blockquote>
<p>If a contract was signed due to economic duress, is it void or
voidable?</p>
</blockquote>
<p>No.</p>
<p>Economic duress is not a ground to find that a contract is void or voidable.</p>
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<p>is it automatically void or is it voidable by the victim if they
choose?</p>
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<p>Some kinds of conduct do give rise to a duress defense to a contract (e.g. a threat of violent conduct directed at the other party to the contract or someone connected to them which also constitutes criminal extortion), and while I'm not familiar with cases specific to illegal economic duress as defined in the question, usually, duress that is an affirmative defense to contractual liability causes a contract to be voidable but not void.</p>
<p>I can't recall ever seeing anyone prevail on an affirmative defense of illegal economic duress, although I recognize that such cases exist in circumstances that include the conditions described by the question (i.e. in circumstances where the economic pressure applied arose from or involved illegal conduct by the party seeking to enforce the contract).</p>
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<p>Can the victim choose to enforce the contract if s/he so wishes?</p>
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<p>A victim of conduct that makes a contract voidable can generally enforce a voidable contract. In contrast, no one can enforce a void contract (e.g., if it is void due to illegality or because the person who supposedly assented to it didn't execute it knowing that it was a contract which is called fraud-in-the-factum).</p>
<blockquote>
<p>What if the victim only wants to enforce certain parts of the contract
(assume the contract contains a clause stating that if one clause is
unenforceable it shall shall not prevent other clauses from being
enforced)? Does the victim have the option to enforce specific parts?</p>
</blockquote>
<p>Generally not.</p>
<p>One exception is the &quot;severability&quot; doctrine is applied to arbitration clauses in contracts that are voidable as a whole due to the existence of an affirmative defense. The doctrine will allow such contracts to be subjected to arbitration, unless there is a problem specific to the arbitration clause, even if there is an affirmative defense to enforceability of the contract, such as duress, that otherwise renders the contract as a whole voidable.</p>

<h2>Voidable</h2>
<p><a href="/questions/tagged/australia" class="post-tag" title="show questions tagged &#39;australia&#39;" aria-label="show questions tagged &#39;australia&#39;" rel="tag" aria-labelledby="australia-container">australia</a></p>
<p><a href="https://www.australiancontractlaw.info/law/duress" rel="nofollow noreferrer">Duress</a> must be “illegitimate” pressure by one party on another and can include illegitimate <a href="http://lawcentral.com.au/LCNewsArchive/LCNewsIssueDetails_Public.asp?NormalViewIssueNumber=691" rel="nofollow noreferrer">economic</a> pressure.</p>
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<p>Historically in Australia and other jurisdictions, the concept of economic pressure was not considered a legitimate basis for common law duress. This changed in <em>Universe Tankships Inc. of Monrovia v. International Transport Workers Federation and Others</em> [1982] 2 All ER 67 where the English courts established the precedent that economic duress can give rise to a duress claim. While this position has been adopted in Australia, some more recent developments have altered the doctrine.</p>
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<p>What constitutes illegitimate economic pressure has conflicting precedents and the High Court has not resolved the ambiguity. It is accepted that conduct that is unlawful (e.g. a threatened breach of contract) is illegitimate but it is not clear if lawful but unconscionable conduct is illegitimate.</p>
