George Mason School of Law

1. George Mason School of Law Contracts II Duress F.H. Buckley fbuckley@gmu.edu

2. Physical Duress is an easy one Lee Marvin, as highwayman Liberty Valance, holding up Jimmy Stewart, The Man Who Shot Liberty Valance (John Ford, 1962)

3. Physical Duress is an easy one Restatement § 174

4. The Highwaymen 1962

5. Ninth Circuit Judge Steve Trott

6. The Highwaymen 1996

7. The HighwaymenTheir Opening Act 7

8. Was that duress?

9. Was that duress? • Assume I have the right to do x (sue Johnny Cash) • When is it wrongful to say “I will do x unless you do y”

10. So what was the duress in Wolf v. Marlton?

11. What was the duress in Wolf v. Marlton? A white crowd gathers on the front porch at 1863 E. 70th Street in South Los Angeles, where W.H. Whitson planned to sell his home to a black family. Sept. 7, 1949, LA Weekly 11

12. Was that duress? What did the Δ’s do? 12

13. What did the Δ’s do? 4th Grade Class, Beeler Public School, Marlton NJ, 2007 13

14. Was that duress? • Just why was the threat wrongful? • Restatement § 175 (an “improper threat”)

15. Was that duress? • Just why was the threat wrongful? • Wrongful “in a moral sense”? An “outrageous purpose”? 15

16. Was that duress? • Just why was the threat wrongful? • Wrongful “in a moral sense”? An “outrageous purpose”? • When does a party breach “the duty of good faith and fair dealing” in Restatement § 176(1)(d)? 16

17. Was that duress? You’re a New Jersey judge in 1959. You’re handed Wolf, and you think segregation is an evil. What do you do? 17

18. Was that duress? • You’re a New Jersey judge in 1959. You’re handed Wolf, and you think segregation is an evil. What do you do? • What is worse? Making the threat or succumbing to it? Or is it the same?

19. Was that duress? • You’re a New Jersey judge in 1959. You’re handed Wolf, and you think segregation is an evil. What do you do? • How do the incentives cut? 19

20. Was that duress? • What’s the remedy the Π’s seek? And why should that matter?

21. Was that duress? • What’s the remedy the Π’s seek? And why should that matter? • Rescissionary relief an equitable remedy • The clean hands doctrine

22. Was that duress? • Just why was the threat wrongful? • Wrongful “in a moral sense”? An “outrageous purpose”? • “malicious motives”? • Can you define malice? 22

23. Was that duress? Orson Welles and Michael MacLiammoir, Othello, 1952 • Just why was the threat wrongful? • Wrongful “in a moral sense”? An “outrageous purpose”? • “malicious motives”? • Can you define malice? 23

24. Was that duress? • Just why was the threat wrongful? • Wrongful “in a moral sense”? An “outrageous purpose”? • “malicious motives”? • Can you define malice? • Restatement § 176(2)(a) 24

25. Was that duress? • Suppose that the threat was to sell the house to a member of the mob? Would that have made a difference?

26. Was that duress? • Just why was the threat wrongful? • Wrongful “in a moral sense”? An “outrageous purpose”? • “malicious motives”? • The intensity of the pressure on the Δs? 26

27. Was that duress? • Is this case like Hochman? • “Further instructive is…”

28. Improper threats • The threat to reveal an embarrassing secret?

29. Improper threats • The threat to reveal an embarrassing secret? • Cf. Restatement § 176(1)(a) (“or if the threat itself…”) • Why is blackmail a crime?

30. Improper threats • The threat to reveal an embarrassing secret? • Cf. Restatement § 176(1)(a) (“or if the threat itself…”) • Why is blackmail a crime? • Doesn’t it increase the cost of misbehavior? 30

31. Improper threats • The threat to reveal an embarrassing secret? • Cf. Restatement § 176(1)(a) (“or if the threat itself…”) • Why is blackmail a crime? • Doesn’t it increase the cost of misbehavior? • What else is going on? 31

32. George Mason School of Law Contracts II Duress F.H. Buckley fbuckley@gmu.edu 32

33. Improper threats • The threat to bring criminal proceedings. • Restatement § 176(1)(b)

34. Improper threats • The threat to bring criminal proceedings • The bad faith threat to commence a civil action. • Restatement § 176(1)(c) 34

35. Improper threats • The threat to bring criminal proceedings • The bad faith threat to commence a civil action • What if the Π has no knowledge of Δs wrongdoing and asks for a settlement that is less than the cost of discovery? 35

36. Contract ModificationAustin v. Loral Why did Loral agree to the contract modification? 36

37. Contract ModificationAustin v. Loral • Situational monopolies • The possibility of post-contractual opportunism • What should the courts do? 37

38. Contract ModificationAustin v. Loral • Suppose you had been counsel for Austin. How might you have amended your pleadings?

39. Contract ModificationAustin v. Loral • Suppose you had been counsel for Austin? How might you have amended your pleadings? • UCC §2-209(1)

40. Contract ModificationAustin v. Loral • Suppose you had been counsel for Austin? How might you have amended your pleadings? • UCC §2-209(1) • UCC § 1-304. Every contract or duty within [the Uniform Commercial Code] imposes an obligation of good faith in its performance and enforcement • Restatement § 89 40

41. Why a different result in Chouinard?

42. Why a different result in Chouinard? The Chicken Game in Rebel without a Cause

43. Modeling the Chicken Game Player 2 Player 1 43

44. Examples of Chicken • Chouinard?

45. Examples of Chicken • Chouinard? • The Constitution of 1789?

46. Examples of Chicken • Chouinard? • The Constitution of 1789 • The decision to provision Fort Sumpter?

47. Rescue Contracts SS Strathclyde, 1876

48. Rescue at Sea • How do Admiralty Courts handle rescue claims? • Post v. Jones

49. Rescue at Sea • How do Admiralty Courts handle rescue claims? • Post v. Jones • What would an efficient rescue contract look like?

50. Rescue at Sea • How do Admiralty Courts handle rescue claims? • Post v. Jones • What would an efficient rescue contract look like? • It would minimize all costs associated with the possibility that the ship will be lost PLUS the rescue costs