LEGAL CH 12, 13, 14

Substantial Performance

(1) Completion of nearly all the terms of the agreement (2) An honest effort to complete all the terms (3) No willful departure from the terms of the agreement

Two types of remedies

1) Legal (money) 2) Equitable (court action)

Three main situations in which the courts find objective impossibility:

1. Destruction of the subject matter 2. Death or incapacity of a party whose personal services are necessary 3. Subsequent illegality

Third-Party Rights to Contracts:

1. One of the contracting parties transfers rights or duties to a third party 2. The third party is a direct beneficiary of a contract involving two other parties

Exceptions under the UCC

1. oral contracts between merchants selling goods to one another need not be in writing 2. oral contracts for customized goods are enforceable, even if they would normally have to be in writing

Hamilton v. State Farm Fire & Causality Insurance Company case

Hamilton's house was destroyed by a hurricane, and their storage trucks were stolen; filed a claim with State Farm. State Farm wanted to look at their garages, Hamilton denied. State Farm did not pay the claim because of their refusal. Hamilton sued. State Farm stated that Hamilton committed a material breach of their contract due to them not complying. The courts decided that State Farm did not have to pay because the Hamilton's did in fact commit a material breach.

Genuine Assent

Meeting of the Minds (required for agreement of a contract)

Performance Subject to Satisfaction of a Contracting Party

Satisfaction may be judged according to either a subjective or an objective standard

Reformation

Sometimes a written contract does not reflect the parties' actual agreement, or there may be inconsistencies in the contract, so the written document may be rewritten to reflect what the parties had agreed on - Typos

Merger Clause

a clause in a written agreement within the statute of frauds that states that the written agreement accurately reflects the final, complete version of the agreement - Not every state follows this clause

Express Condition

a condition specifically and explicitly stated in a contract and usually preceded by words such as conditioned on, if, provided that, or when

Conditional Contracts

a contract that becomes enforceable only on the happening or termination of a specified contract - May either be implied by law or expressly inserted into the contract by the parties

Delegation

a contracting party's (a delegator's) transfer of his or her duty to perform to a third party who is not part of the original contract (a delegatee)

Nondisclosure

a failure to provide pertinent information about a projected contract; PASSIVE

Fraudulent Misrepresentation

a false representation of a material fact that is consciously false and is intended to mislead the other party - Fraudulent misrepresentation is intentional representation. Here scienter is clear.

Negligent Misrepresentation

a false statement of material fact made by a party who thinks it is true but who would have known the truth about the fact that he or she used reasonable care to discover or reveal it - Even though there was no actual intent to deceive, the party making the false statement is treated in contract law as if the intent were present - Can sue for damages: damages here are the same as fraudulent misrepresentation

Mistake

an erroneous belief about the facts of a contract at the time the contract is concluded (the time the agreement is made) - Mistakes in contract law do not result from the untrue statements of the other party to the contract - Mistakes come about from a misunderstanding or wrong belief about a material fact

secondary obligation

are within the statute and DOES need to be in writing; arises when a party outside a primary agreement promises to fulfill one of the original party's obligations if the original party fails to fulfill their obligation

Expectation Damages

compensate a person for the benefit he or she expected to gain as a result of entering into the contract

Punitive Damages

compensation awarded to a plaintiff that goes beyond reimbursement for actual losses and is imposed to punish the defendant and deter such conduct in the future; the amount depends on the wealth and income of the defendant - Occurs in contracts that involve fraud

Allan vs Nersesova Case:

condo disputes; Allan sues Nersesova (the manager) for negligence and sues for breach of contract (under the Homeowner's Association agreement). Court said Allan had rights because she is an intended third-party beneficiary.

Liquidated Damages

damages specified as a term of the contract, before a breach of contract occurs - Most commonly seen with contracts - The parties specify these damages in a liquidated or stipulated-damage clause - Is decided on before so you don't have to take it to court—they decide if it's reasonable - Can be unfair when one party is in a superior bargaining position (unconscionable)

primary obligation

debts entered into in an initial contract; does not have to be in writing

Alteration of a Contract

if one of the parties materially alters a written contract without the knowledge of the other party, the courts have held that such alteration allows the innocent party to be discharged from the contract

Subjective

matters of personal taste; person has to be satisfied in order to pay you per the contract

Objective

mechanical or utility standard; something other than a matter of personal taste; is based on if a reasonable person would be satisfied with the performance

Nominal Damages

monetary damages awarded to a plaintiff in a very small amount, typically $1 to $5, to signify that the plaintiff has been wronged by the defendant even though the plaintiff suffered no compensable harm

Compensatory Damages

money awarded to a plaintiff as reimbursement for his or her losses; based on the amount of actual damage or harm to property, lost wages or profits, pain and suffering, medical expenses, disability, and so on; most frequently awarded - Puts the plaintiff in the position as if the contract had been fully performed - These damages are said to compensate the plaintiff for his loss of the benefit of the bargain. He can only recover for those provable losses that were foreseeable at the time the contract was entered into

Mutual Rescission

parties may agree that they simply wish to discharge each other from their mutual obligations and therefore may rescind or cancel the contract

innocent misrepresentation

permit the party that was misled by the false statement to rescind the contract, and the aggrieved party cannot sue for damages because they lacked intent

subjective impossibility

possible, but it would be very difficult to carry out the contract

Breach

someone fails to perform their obligations under a contract

Impossibility of Performance

sometimes an unforeseen event occurs that makes it physically or legally impossible for a party to carry out the terms of a contract. The parties will be discharged on grounds of impossibility of performance.

Substituted Contract

sometimes, instead of canceling the contract and terminating their relationship, both parties want to substitute a new agreement in place of the original. The substituted contract immediately discharges the parties from their obligations under the old contract and replaces those obligations with the new obligations imposed by the substituted contract.

Duty to mitigate one's damages

the plaintiff must demonstrate that he used reasonable efforts to minimize the damage resulting from the breach

Unilateral Mistake

the result of an error by ONE PARTY about a material fact, that is, one that is important in the context of a particular contract - In general, a unilateral mistake does NOT void a contract - Courts will enforce it because they don't think it's fair to the other party that did understand the contract

Rescission

the termination of the contract

Accord and Satisfaction

used when one of the parties wants to substitute a different performance for his original duty under the contract. - The promise to perform the new duty is called the accord - The actual performance of that new duty is called the satisfaction - The party's duty under the contract is not discharged until the new duty is actually performed

Commercial Impracticability

used when performance is still objectively possible but would be extraordinarily injurious or expensive to one party. Arises when, because of an unforeseeable event, one party would incur unreasonable expense, injury, or loss if that party were forced to carry out the terms of the agreement

Promises Made in Consideration of Marriage (2)

- Agreements regarding marriage in which one party is gaining something other than a return on his or her promise to marry are within the statute of frauds and MUST be in writing - Mutual promises to marry DO NOT fall within the statute of frauds, but prenuptial agreements do

Duties that cannot be Delegated:

1. Duties that are personal in nature 2. Duties for which the delegatee's performance will vary significantly from the delegator's 3. Duties in contracts that forbid delegations

Vesting of Rights

Although an intended beneficiary can enforce her rights to a contract she cannot do so until her rights to the contract vest, that is, until the rights mature so that a party can legally act on the rights.

Telekenex IXC, Inc v. Charlotte Russe, Inc. case

Decision: There WAS an immediate and substantial economic loss, court sent to trial to determine duress. There was enough evidence to prove such.

Implied Condition

a condition that is not specifically and explicitly stated but is inferred from the nature and language of the contract

objective impossibility

not possible to lawfully carry out one's contractual obligations

Discharge

obligations and duties have been completed

Anticipatory Repudiation

- A contracting party may decide not to complete the contract before the actual time of performance; discharge party from obligations - Usually occurs when market conditions change, and one party realizes it would not be profitable if they carry out the terms of the contract - The breaching party may convey an anticipatory breach to the nonbreaching party either by making an express indication of their intent not to perform or by impliedly taking an action that would be inconsistent with their ability to carry out the contract when performance was due - Once the contract has been anticipatorily repudiated, the nonbreaching party is discharged from his obligations under the contract.

Courts will find nondisclosure as having the same legal effect as an actual false assertion under certain circumstances:

- A relationship of trust exists between the parties to the contract. The relationship provides a reasonable basis for one person's expectation that the other would never act to defraud him or her - There is a failure to correct assertions of fact that are no longer true in light of events that have occurred since the initial consent to the terms of the agreement.

Contracts that have been Subsequently Modified

- Although parol evidence contradictory to the final terms is inadmissible, evidence regarding a contract's subsequent modification is admissible - To be admissible, the modification must have been made after the writing, and the evidence must clearly indicate this later modification - Oral evidence of a subsequent written agreement is admissible

Contracts Whose Terms Prevent Possible Performance Within One Year (1)

- Contracts whose performance, based on the terms of the contract, could not possibly occur within one-year fall within the statute of frauds and, therefore, MUST be in writing - The one-year period begins to run the day AFTER the contract is created, not when the contract is scheduled to begin - The test considers the possibility of completing the contract within one year, so if they decide it can be completed within one year, it does not require writing

Benefits to written contracts:

- Disputes are easier to settle when the contractual terms are in writing - When parties to a contract write down their terms, the moment of writing allows both parties to reconsider their terms and ensure that the parties are advocating what they desire in the contract - Help business contracting flow more smoothly

Required elements in the writing include:

- Identification of the parties to the contract - The subject of the agreement - The consideration - Any pertinent terms of the contract - Sign

Evidence of Prior Dealings or Usage of Trade (UCC)

- Parol evidence is admissible for the sake of clarification if the evidence addresses prior dealings between the parties or usages of trade in the same business field as that which the parties are in - Evidence related to past dealings can help clarify missing or ambiguous terms by examining how the parties had previously interacted

Contracts with Obvious Typographical Errors

- Parol evidence is admissible to demonstrate that the typo was a typo and to set forth the proper term - The agreement is not altered by correcting a typo; rather, the agreement is clarified

Methods of Discharging a Contract

- Performance - The occurrence of a condition or its failure to occur - Material breach by one or both parties - Agreement of the parties - Operation of law

Restrictions for assignments to be valid:

- The UCC requires assignments to be in writing when the amount being assigned is greater than $5,000 - Assignments covered by the statute of frauds must be in writing - An assignee must agree to accept the assigned rights. An assignee may decline an assignment if he has not legally agreed to the assignment and he declines in a timely fashion

Void or Voidable Contracts

- The courts allow parol evidence to demonstrate that the contract is void or voidable - The parol evidence addresses the enforceability of the agreement, which does not change the terms of the agreement - Evidence of a defense against a contract is admissible to prove a contract is void or voidable

Contracts Conditioned on Orally Agreed-On Terms

- The parol evidence rule does not prevent parties from introducing evidence proving the written agreement was conditioned on terms agreed to orally - When an entire contract is conditioned on something occurring first, that first thing is known as a condition precedent. Existence of the evidence of a condition precedent agreed to orally is admissible because the contract is not modified by the evidence

Contracts for One Party to Pay the Debt of Another if the Initial Party Fails to Pay (3)

- These promises are referred to as secondary promises, collateral promises, or suretyship promises - All of these terms refer to agreements in which a third party agrees to pay the debt owed by another party if that party fails to pay his or her debt

Contracts Containing Ambiguous Terms

- To attempt to reach the most accurate interpretation of the original agreement, the court allows evidence, even if it is oral, for the sole purpose of clarifying ambiguous terms - Evidence used to clarify ambiguity is not believed to modify the contract but, rather, to clarify it

One of three things must occur for a third-party's right to contract to vest:

- Under certain circumstances, third-party rights vest immediately. When rights vest immediately, the third party can enforce the contract at any time. - Rights may vest when the beneficiary decides to accept the rights to the contract - Rights may vest when the beneficiary changes his position because of reliance on the contractual rights

Contracts Related to an Interest in Land (4)

- Under the statute of frauds, land is considered real property, such as the land and soil itself, as well as anything attached to the land such as trees or buildings - The statute is intended to prevent oral claims to the existence of a contract for the sale of land - Mortgages and leases are within the statute of frauds because they are considered transfers of interest in land - Selling your crops does not have to be in writing - Negotiations over interests in land is not required to be in writing, but the courts decide what does fall under statute of frauds

Non-finalized, Partially Written and Partially Oral Contracts

- When a contract consists of both written and oral elements, judges tend to treat the agreement as non-finalized - The judge makes the assumption that the parties do not intend the written agreement to represent the entire agreement

Incomplete Contracts

- When a contract is fundamentally flawed because it is missing critical information, courts can allow parol evidence to provide the missing information—essential terms missing from the contract - Parol evidence will be admitted to clarify the contract by filling in the missing parts while not modifying the written agreement

Exceptions to the Statute of Frauds

1. Admission 2. Partial performance 3. Promissory estoppel 4. Exceptions under the UCC APPU

The statute's requirements impose on parties the need to

1. Consider the terms 2. Agree to the terms 3. Write them down 4. Sign the contract

Exceptions to the Parol Evidence Rule:

1. Contracts that are subsequently modified (made after the contract is formed) 2. Contracts conditioned on orally agreed-on terms (condition precedent) 3. Contracts that are not final because they are part written and part oral 4. Contracts with ambiguous terms (clarifying, not modifying) 5. Incomplete contract 6. Contracts with obvious typographical errors 7. Voidable or void contracts SONA ITV

Contracts Falling within the Statute of Frauds

1. Contracts whose terms prevent possible performance within one year 2. Promises made in consideration of marriage 3. Contracts for one party to pay the debt of another if the initial party fails to pay 4. Contracts related to an interest of land 5. (Required by the UCC) Contracts for the sale of goods totaling more than $500 In one year, MDLC

A party seeking equitable relief must meet five requirements

1. No adequate legal remedy is available 2. Irreparable harm to the plaintiff may result if the equitable remedy is not granted 3. The contract is legally valid 4. The contract terms are clear and unambiguous 5. The plaintiff has "clean hands," has not been deceitful or done anything in breach of the contract

The rule

1. Parol evidence applies to both parol (spoken words) and written speech; covers evidence extrinsic to the original writing and is not limited to spoken words 2. The parol evidence rule is not a rule of evidence but, rather, relates to substantive legal issues, namely, what constitutes a legally binding agreement and how we know what the agreement is 3. The parol evidence rule is not a unitary concept or rule but an amalgamation of different rules and conditions

Rights that cannot be Assigned:

1. Rights that are personal in nature 2. Rights that increase the obligor's risk or duties 3. Rights whose assignment is prohibited by contract 4. Rights whose assignment is prohibited by law or public policy

The Statute of Frauds has three main purposes:

1. To ease contractual negotiations by requiring sufficiently reliable evidence to prove the existence of and specific terms of a contract 2. To prevent unreliable oral evidence from interfering with a contractual relationship 3. To prevent parties from entering into contracts with which they do not agree

Manderville v. PCG&S Group, Inc case

A plaintiff's negligence in failing to investigate a defendant's intentional misstatement is not sufficient to eliminate the possibility that a plaintiff's reliance on the statement was reasonable; involved an exculpatory clause against public policy

Contracts for the Sale of Goods Totaling More Than $500 (5)

Agreements in which the total price for a sale is $500 or more required by the UCC, to be recorded in a written contract or a memorandum, and need only state the quantity to be sold

Simkin v. Blank

Example of unsuccessful attempt to avoid a contract on the basis of mutual mistake: Couple divorced and split their assets, however the husband had invested his money in a Ponzi scheme so lost some money, claimed to have decided to invest this money with his wife (mutual mistake). But No account ever existed. The mutual mistake must have existed at the time the agreement was executed in 2006. Ruled in favor of Blank (wife)

Exception concerning when a promise to pay someone else's debt needs to be in writing:

Main-Purpose Rule: if the main purpose for incurring a secondary obligation is to obtain a personal benefit, the promise does not fall within the statute and need not be in writing. The assumption is that a party attempting to achieve a personal benefit will not back out of the agreement; thus, there is no need for a written record

Recovery Based on Quasi-Contract

When an enforceable contract does not in fact exist, the court may grant a recovery based on quasi contract; that is, the court may impose a contract-like obligation on a party to prevent an injustice from occurring.

Frustration of Purpose example

You fly to NYC and buy a hotel room onlooking to Macy's Thanksgiving Day Parade, but the weather causes the parade to be cancelled. You can use frustration of purpose if you inform the hotel that you are coming to the hotel only for the parade.

Parol Evidence Rule

a common law rule that states that oral evidence of an agreement made prior to or contemporaneously with a written agreement is inadmissible when the parties intend the written agreement to be the complete and final version of their agreement - Means "speech" or "words," specifically words outside the original contract - Purpose: to restrict evidence from being admitted that substantially contradicts or modifies the agreement in its written form - Courts determine whether the contract is complete or not

Third-Party Beneficiary Contract

a contract created when two parties enter into a contract agreement with the intended purpose of benefitting a third party - The third party does not need to be explicitly named in the contract as long as the terms of the contract or the events occurring after the creation of the contract make it clear who the intended recipient is

Assignment

a contracting party's transfer of his or her rights to a contract to a third party

Obligor

a contractual party who agreed to do something for the other party (tenant)

Obligee

a contractual party who agreed to receive something from the other party (landlord)

Injunction

a court order either forcing a person to do something or prohibiting a person from doing something - Most common are prohibitions against actions

Misrepresentation

a false statement about a fact material to an agreement that the person who made the statement believed to be true - The person who made the false statement has no knowledge of the falsity of the claim, so the person lacked scienter (intent)

Condition Subsequent

a future event that terminates the obligations of the parties when it occurs - Example: Jon may enter into an agreement to lease an apartment for five years, conditioned on him not being called to active duty in the Nation Guard. If he is called to serve, his obligation to be bound by the lease is discharged and terminated

Condition Precedent

a particular event that must occur for a party's duty to arise. If the event does not occur, the party's duty to perform does not arise. - Example: real estate contracts are conditioned on an event such as the buyer's ability to sell his current home by a certain date. If the home does not sell, the condition does not arise, and the parties have no duty to perform and are thus discharged by the contract

Delegator

a party in a contract who transfers his or her duties to perform to a third party who is not part of the original contract (a delegatee)

Material Breach

a substantial breach of a significant term or terms of a contract that excuses the nonbreaching party from further performance under the contract and gives the nonbreaching party the right to recover damages - Occurs when a party unjustifiably fails to perform their obligations substantially under the contract - Courts tell us whether a breach is substantial or not

Intended Beneficiary

a third party to a contract whom the contracting parties intended to benefit directly from their contract - The contract itself says who the intended party is - Does not have to be named by name, just have to be identified: "my spouse, my children" - Must be primary and direct per the contract

Delegatee

a third party who is not part of the original contract but to whom duties to perform are transferred by one of the contracting parties (a delegator)

Integrated Contract

a written contract intended to be the complete and final representation of the parties' agreement - When the courts deem a contract integrated, unless one of the above exceptions applies, parol evidence is inadmissible - Intent to integrate: merger clause depending on the state

Prenuptial Agreement

an agreement two parties enter into before marriage that clearly states the ownership rights each party enjoys in the other party's property. To be enforceable, the agreement MUST be in writing; promise made in consideration of marriage

Donee

an intended third party who benefits from a contract in which a promisor agrees to give a gift to the third party -Ex: life insurance policy

Creditor Beneficiary

an intended third party who benefits from a contract in which the promisor agrees to pay the promisee's debt - Ex: Credit card company

Tender

an offer by a party in a contract to perform, along with being ready, willing, and able to perform, a duty outlined in that contract - If the other party doesn't let you, then you are discharged

Specific Performance

an order of the court requiring a breaching party to fulfill the terms of the contract; also called specific enforcement - Occurs in real estate: courts will order specific performance

Duress

any lawful act tor threat exercised on a person whereby the person is forced to enter into an agreement or to perform some other act against his or her will; contract is VOIDABLE

Consequential/Special Damages

foreseeable damages that result from special facts and circumstances arising outside the contract itself. The damages must be within the contemplation of the parties at the time the breach occurs

Complete Performance

occurs when all aspects of the parties' duties under the contract are carried out perfectly - In many instances, complete performance is difficult, if not possible, to attain, and courts today generally require only substantial performance

Incidental Beneficiary

one who unintentionally gains a benefit from a contract between other parties - CANNOT bring a lawsuit - Is determined by: whether a reasonable person in that position (the person receiving the benefit) would believe whether the parties intended to benefit that them

Intent to Deceive

present when the party making the false statement claims or implies that he or she has personal knowledge of the accuracy of the assertion. - Any resulting assent is not legal because the injured party was not allowed to join the mind of the deceiving party

Frustration of Purpose

sometimes, when a contract is entered into, both parties recognize that (1) the contract must be partially executory; (2) the contract is intended to fulfill a particular purpose, and (3) the frustration was reasonably foreseeable when the contract was made. If, due to factors beyond the control of the parties, the event does not occur, and neither party had assumed the risk of the event's nonoccurrence, the contract may be discharged

Admission

statement made in court, under oath, or at some stage during a legal proceeding in which a party against whom charges have been brought admits that an oral contract existed, even though the contract was required to be in writing

Concurrent Conditions

terms under which each party's performance is conditioned on the performance of the other; occur only when the parties are required to perform for each other simultaneously - The legal effect of a concurrently conditioned contract is that each party must offer to perform before being able to sue the other for nonperformance

Concealment

the ACTIVE hiding of the truth about a material - Ex: removing 20,000 miles from the odometer on your car before selling it to me - Fraudulent misrepresentation

Tolling of the Statute of Limitations

the expiration of the time allowed by the statute does not technically discharge a party's obligations under the contract, however, once the statute of limitations has tolled, neither party can any longer sue the other for breach, so for all practical purposes the parties are no longer bound to perform

Promissory Estoppel

the legal enforcement of an otherwise unenforceable contract due to a party's detrimental reliance on the contract - The party's reliance must be to his or her own detriment. Furthermore, the reliance must have been reasonably foreseeable: the party who did not rely on the contract should have known the other party would rely on it

Assignee

the party who receives the rights of another party (the assignor) to collect what was contractually agreed on in the original contract

Assignor

the party who transfers his or her rights to the contract to the third party (an assignee), giving the assignee the right to collect what was contractually agreed on in the original contract

Substantial performance discharges

the party's responsibilities under the contract, although the court may require the party to compensate the other party for any loss in value caused by the failure to meet all the standards set forth in the contract.

Partial Performance

the performance of portions of an unwritten agreement by one or both parties can constitute proof that an oral contract exists between the parties - ONLY occurs in the sale of land; have to paid at least a portion of the sale price and take possession of the property or begin to improve the property

Incidental Damages

the plaintiff may suffer losses caused directly by the breach

Mutual Mistake

the result of an error by BOTH PARTIES about a material fact, that is, one that is important in the context of a particular contract - When both parties to a contract are mistaken about either a current or past material fact, either party can choose to rescind the contract - No meeting of the minds—VOIDABLE and can be rescinded - Rescinding such a contract is fair because any agreement between the parties was an illusion: An ambiguity in some key fact prevented the parties from being in actual agreement

Undue Influence

the situation in which one person has taken advantage of his or her dominant position in a relationship to persuade the other person unduly to the extent that the dominant person's persuasive efforts have interfered with the other person's ability to make his or her own decision - Employer, doctor, or relative giving care are examples - Contract becomes VOIDABLE

Novation

the substitution of a third party for one of the original parties; the duties remain the same under the contract, but one original party is discharged, and the third party takes that original party's place; requires agreement from all of the parties - Different from delegation because the original party no longer has obligations in the contract as opposed to in a delegation

Restitution

the turn of any property given up under a contract; give back what you got - Most frequently awarded in situations in which there is a lack of genuine assent

Bankruptcy

when a party files bankruptcy, the court allocates the assets of the bankrupt among the bankrupt's creditors and then issues the party a discharge in bankruptcy. Once the assets have been distributed, all the bankrupt's debts are discharged

For a mutual mistake to interfere with legal consent, it must involve:

• A basic assumption about the subject matter of the contract; quality, quantity, or existence • A material effect on the agreement; must involve the essence of the agreement • An adverse effect on a party that did not agree to bear the risk of mistake at the time of the agreement

Requirements for fraudulent misrepresentation:

• A false statement about a past or existing fact that is material to the contract • Intent to deceive • Justifiable reliance on the false statement by the innocent party to the agreement • (If damages are sought) The defrauded party must have been injured by the misrepresentation

Any of the following conditions would permit a court to invalidate a contract on grounds of unilateral mistake; thus, making it voidable:

• One party made a mistake about a material fact and the other party either knew or had reason to know about the mistake • The mistake was caused by a clerical error (typing error) that did not result from gross negligence • The mistake was so serious that the contract is unconscionable (super unfair), that is, so unreasonable that it is outrageous

Any of the hollowing would trigger a successful request for rescission on grounds of duress:

• One party threatens physical harm or extortion to gain consent to a contract • One party threatens to file a criminal lawsuit unless consent is given to the terms of the contract; initiate investigation, police report • One party threatens the other's economic interests (economic duress)