What is Duress?

Duress is pressure that one person or entity puts on another person to do something that he or she would normally not do.

How Does Duress Work?

Let's say Artie owns a restaurant called Vesuvio. One day, a big bald guy comes into the place and tells Artie that he has to sign a contract to start buying linens from his friend or he'll 'make life hard.'

Artie, fearing that he'll be harmed physically or that the restaurant will be vandalized, agrees to buy linens from the friend, even though they cost twice as much as those from other distributors.

Artie has made the agreement under duress.

Why Does Duress Matter?

Using force, false imprisonment, threats or psychological pressure to make someone do something he or she normally wouldn't do is illegal and can negate any contracts that result from duress.

Accordingly, in our example, if Artie were brave enough to stop buying the linens, he could tell the court that he signed the contract under duress.

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Paul Tracy
Paul Tracy

Paul has been a respected figure in the financial markets for more than two decades. Prior to starting InvestingAnswers, Paul founded and managed one of the most influential investment research firms in America, with more than 3 million monthly readers.

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