Legal Analysis of Contract Validity Under Duress and Incapacity

Case Scenario

Ed contracted with Becky to build a house. Immediately prior to that meeting, Becky was so nervous that she drank an entire bottle of champagne, so she did not remember all of the details of the meeting. Shortly before the closing, Ed met with Becky, accused her of fraud, and threatened to prevent the contract from going to closing.

Ed’s associate, a former stunt double for Dwayne “the Rock” Johnson, stood outside the door for two hours to prevent Becky from leaving. Ed gave Becky the choice of signing a new contract promising him more money for the build or going to court. Becky signed the agreement but now has sought legal advice.

Overview

Contract law dictates special conditions that allow an agreement and a transaction to be governed by legal decrees. The absence of any necessary element to enter into a contract prevents it from being fully executed. In the case of Becky and Ed, an invalid contract was signed, so Becky’s behavior should not be considered a fraud attempt but rather the creation of a non-compete with the expressed influence of one of the parties.

Advice for Becky

First, the terms of the contract and the repeated attempts to sign/renew it should be considered. In the case of the first transaction, where Ed is the initiator, there is an incomplete conformity of transparency and honesty in the signing on Becky’s part (Mallor et al., 2013). She had had a bottle of champagne and was very nervous, and as a result, she did not remember most of the details of the deal. All parties should have sound minds and capacity, so Becky was legally unprepared to sign the agreement (Randall, 2020).

Ed probably knew this and saw it, so he could even influence Becky to sign the original contract. The main advice for Becky is to operate on these facts when going to court because she was not legally capable and could have succumbed to pressure (Miller, 2022). Failure to comply with the Offer and Acceptance rule results in an invalid contract with no legal value.

On Ed’s part, in the second case, there was a complete breach of the terms of signing the deal. This case differs from lobbying or siding with him because Ed used physical and psychological coercion to get Becky to sign the contract. His assistant acted as an instrument of physical pressure, so it is evident that the woman, probably of less height and weight, was intimidated. In addition, Ed himself exerted psychological pressure as he claimed fraud and threatened to go to trial (Mallor et al., 2013).

The trial frightened Becky, and although the court could have sided with her, Ed used threats and accusations as arguments that pressured Becky. This situation is a demonstration of coercion and undue influence on one party (Mallor et al., 2013). Consequently, the contract is null and void, and Becky should go to court (Randall, 2020). However, the court may not side with her if Becky does not gather enough evidence to support the violations.

Second, as a lawyer, I should carefully examine the provisions of both contracts. It is needed to assess the potential harm and analyze the possible outcomes for Becky in litigation cases. Nevertheless, neither contract is valid and enforceable at this time (Mallor et al., 2013). The terms of the contract have been violated, and the court must side with Becky. Becky should gather evidence, accurately reproduce the history of events preceding the contract, and go to court.

Thus, the case should be analyzed based on the law and the terms of the agreement. The law states that agreeing while incompetent (under the influence of alcohol or drugs) would be invalid. In addition, Becky has no recollection of the terms of the agreement, and no physical copy of the agreement was involved. Moreover, Ed used psychological and physical pressure to force Becky to sign the new contract. Becky should review all of the terms and go to court for breach of contract.

References

Mallor, J. P., Barnes, J. A., Bowers, R., & Langvardt, A. W. (2013). Business law: The ethical, global, and e-commerce environment. McGraw-Hill.

Miller, R. L. (2022). Business law today – the essentials: text & summarized cases. USA, Boston, NY: Cengage.

Randall, M. (2020). Fundamentals of business law. Denver: Community College of Denver. Web.