Question

examples
keith and cross were employees of cbs. they told their supervisor, jacobson, about their idea of forming an independent company to provide video promotion spots. jacobson was in charge of selecting outside vendors and told them he thought they could get a contract with cbs. an exclusive contract was approved by jacobson and his supervisor. keith and cross agreed to remain until their replacements could be hired. the next day jacobson asked them to \help him out\ because he had helped them and asked for $500 per month. although distressed and shocked, they agreed because jacobson could fire them or kill the contract once they left; they felt intimidated and that they had no alternative but to agree. they made three payments and then jacobson demanded $1,000 per month. when they could not pay, jacobson raised problems with their work, and the contract was likely to be canceled. at this point, they told cbs about the demands, and jacobson was fired. a few months later their contract was canceled on the basis of \admitted wrongdoing.\ keith and cross sued for economic duress. will they be successful? why or why not?

Explanation:

Economic duress occurs when one party is forced into a contract due to improper pressure. Here, Jacobson used his position - threatening to kill the contract if Keith and Cross didn't pay him. Their payments were made under intimidation. The subsequent cancellation of their contract on the basis of "admitted wrongdoing" seems related to their refusal to continue paying Jacobson. They had no real alternative but to agree to his demands initially.

Answer:

Yes, they will likely be successful. Jacobson's actions of threatening to kill the contract and demanding money under the guise of "helping him out" when they were employees created improper pressure, which constitutes economic duress.