IUC, which at the time was in financial trouble, now seeks to recover the balance due, arguing that the signed release is not binding because it was signed under economic duress. Is IUC correct? Explain.
International Underwater Contractors, Inc. (IUC), entered into a written contract with New England Telephone and Telegraph Company (NET) to assemble and install certain conduits under the Mystic River for a lump sum price of $149,680. Delays caused by NET forced IUC’s work to be performed in the winter months instead of during the summer as originally bid, and as a result, a major change had to be made in the system from that specified in the contract. NET repeatedly assured IUC that it would pay the cost if IUC would complete the work. The change cost IUC an additional $811,810.73; nevertheless, it signed a release settling the claim for a total sum of $575,000. IUC, which at the time was in financial trouble, now seeks to recover the balance due, arguing that the signed release is not binding because it was signed under economic duress. Is IUC correct? Explain.
Duress means any party of the contract has been deprived of their free will by being forced to sign the contract. Here, Company I can accuse Company N of duress, if Company Istates that:
The CompanyI was forced into the contract with Company N and the decision was of Company I was not voluntary.
There existed no other option than to come into the contract with Company N because of some illegal or unreasonable acts.
Company I started facing financial issues after entering into the contract because of CompanyN's indiscipline and lack of punctuality.
Company N gave false assurances to Company I of bearing all extra expenses, which Company Ndid not do.