Austin V Loral Case Brief

Powered past 22 Ill.29 N.Y.2d 124, 324 N.Y.S.2d 22, 272 N.E.2d 533 (1971)

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22 Ill.29 N.Y.2d 124, 324 N.Y.S.2d 22, 272 N.E.2d 533 (1971)

Brief Fact Summary. Defendant entered into a farm understanding to purchase precision gear components from Plaintiff, which would and so be used by information technology to produce radar sets for the Navy. Afterward performing the kickoff contract betwixt the parties, Defendant awarded another subcontract to Plaintiff, who responded by raising its prices and threatening stoppage of delivery of its parts, should the price increase not be met. Accused was forced to pay the cost increase to receive its new items, but Plaintiff still brought accommodate for charges due on the second contract, which Defendant did non pay after delivery was consummate. Accused countered, claiming that Plaintiff'due south price increase amounted to duress, because it was forced to accept Plaintiff's terms.

Synopsis of Dominion of Law. Duress can be both personal and economic. The key is the effect on a party's practice of free volition.

Points of Law - Legal Principles in this Instance for Law Students.

A contract is voidable on the ground of duress when it is established that the political party making the claim was forced to concord to it by ways of a wrongful threat precluding the exercise of his free will.

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Facts. The Accused, Loral Corp (Accused), was awarded a Navy contract for the product of radar sets. The Plaintiff, Austin Instrument, Inc. (Plaintiff), was a subcontractor who manufactured precision gear components. When Defendant awarded Plaintiff a second farm, on the parts it had bid lowest, Plaintiff raised its prices on all forward and back orders of the gear components, and threatened to terminate delivery if its prices were non paid. When Defendant could not discover the same parts, ready to deliver, past some other manufacturer, it was forced to pay the price increment, in order to meet the terms of its contract. Plaintiff brought suit for charges notwithstanding due on a second contract and Defendant countered for the difference in prices.
At the trial of this thing, Plaintiff was awarded the sum it sought in payment of the contract, and Accused's complaint against plaintiff was dismissed. Defendant appealed.

Issue. This case considers whether duress can be economic in nature and if information technology can, whether it is actionable every bit a vehicle to recover amercement.

Held. Affirmed as to Plaintiff'southward merits, and Modified to allow recovery for Defendant.
The Court found that economic duress did exist, insofar every bit Defendant was forced to buy the parts at Plaintiff's gauged price, out of necessity to meet its own contractual obligation. As opined past the court: "It is manifest that Austin's threat-to stop deliveries unless the prices were increased-deprived Loral of its gratuitous volition."

Dissent. Guess Bergan dissented, arguing that questions concerning acts constituting economical duress are factual and deference should be given to the trial court, which found that the facts did not support duress.

Discussion. Economic duress, as with other duress is seen as a contractual vice when information technology causes a party to requite upwardly its own costless will. In this case, Plaintiff's knowledge of Defendant's desire to run into its own contractual commitment put Plaintiff in a position of coercion.