Reading time: 5 minutes

When you sign a contract on behalf of your business, your signature indicates that your business has agreed to the contractual obligations. However, there may be circumstances where you are pressured into signing a contract document by a particular person or fellow business. In such circumstances, you may be subject to duress. This article will outline:

  • what duress is;
  • how you can prove that you were under duress when you signed a contract; and
  • whether documents signed under duress are enforceable.

What is Duress?

Duress involves the illegitimate use of pressure to compel or coerce you into doing something you would not otherwise do, such as entering into a contract. This pressure will usually be conveyed as a threat. The threat may be to do something:

  • unlawful, such as committing a crime or breaching a contractual obligation. A threat to breach a contractual obligation is known as economic duress. All unlawful acts are deemed to be illegitimate; or
  • lawful but illegitimate. Even if the law does not prohibit an act, it can still be a threat. This lawful act may be a threat to do severe bodily harm or acts that could amount to blackmail. 

If you are under duress, you will be completely aware of what you are doing, yet acting against your own will. 

How Do You Prove That You Signed a Document Under Duress?

It is unnecessary to demonstrate that you were acting completely against your own will when you signed the contract to prove that you were under duress. Instead, to use the defence of duress, you must indicate that:

  • you were under illegitimate pressure, due to a threat or some other act; and
  • this illegitimate pressure induced you into signing the contract document. 

Illegitimate Pressure

A court will only find you to have been under duress if you were subject to illegitimate pressure. Illegitimate pressure is a threat or action that is coercive in its nature. If you were not subject to any coercion, you would not have been under duress. To demonstrate that you were under illegitimate pressure, you may wish to:

  • argue that the pressuring act or threat was unlawful;
  • indicate that you protested to the pressure. For example, say your business received threatening emails to enter into a contract. You could use the emails that you sent in response as evidence that you protested to and disagree with these threats;
  • argue that you did not have an alternative course of action available to you. You will have to demonstrate that, due to the pressure placed on your business, you had no other reasonable or practical choice but to sign the contract; 
  • argue that you did not receive any independent advice to enter into the contract. If a lawyer advised you to enter into the contract, it is unlikely that you will be able to argue that you were under illegitimate pressure when you signed the agreement; and
  • point to the steps that you have taken since signing the agreement to avoid your contractual obligations.

Is a Document Signed Under Duress Legal?

If you can successfully demonstrate that you were under duress when you signed a contract on behalf of your business, the contract will become voidable. Once the contract is voidable, you have the right to cancel your agreement. Upon termination, you will no longer be bound by the contractual obligations that you were coerced into taking on.

However, the defence of duress does not automatically terminate the contract. The other contracting party, or the defendant, could still advance an argument that would prevent you from making the contract void. 

For example, the contracting party may argue that you have subsequently affirmed the agreement despite the existence of duress when you entered the contract. You may have affirmed the contract by:

  • performing your contractual obligations for multiple months after you signed the agreement; or
  • failing to take steps to avoid carrying out these obligations. 

In such circumstances, it may be deemed to be inequitable or unfair to terminate the contract on the basis of duress. 

Key Takeaways

Duress involves the application of illegitimate pressure or coercion to make you do something that you otherwise would not do. If you signed a document on behalf of your business under duress, you might be able to make that agreement void. However, to do so, you must demonstrate that:

  • you were under illegitimate pressure or coercion;
  • this pressure or coercion was the reason that you entered into the contract; and
  • you have not affirmed the contract.

If you have signed a contract under duress and require legal assistance, contact LegalVision’s contract lawyers on 0800 005 570 or fill out the form on this page.

Frequently Asked Questions

What does it mean to be under duress?

When you are under duress, you are being subject to illegitimate pressure that coerces you into doing something that you otherwise would not do.

What are some examples of duress?

Say your business receives multiple emails that threaten that you, your fellow employees, and your family members would be subject to serious physical harm if you do not enter into a specified contract. If this threat coerced you into signing that contract, you could likely argue that you were under duress. 

What are the elements of duress?

To prove duress, you must demonstrate that you were subject to illegitimate pressure and this illegitimate pressure was the reason that you entered into the contract.

What is illegitimate pressure?

Illegitimate pressure is a threat or action that is coercive in its nature.

About LegalVision: LegalVision is a tech-driven, full-service commercial law firm that uses technology to deliver a faster, better quality and more cost-effective client experience.

The majority of our clients are LVConnect members. By becoming a member, you can stay ahead of legal issues while staying on top of costs. From just $119 per week, get all your contracts sorted, trade marks registered and questions answered by experienced business lawyers.

Learn more about LVConnect

Need Legal Help? Get a Free Fixed-Fee Quote

If you would like to receive a free fixed-fee quote or get in touch with our team, fill out the form below.

Our Awards

  • 2019 Top 25 Startups - LinkedIn
  • 2020 Excellence in Technology & Innovation Finalist – Australasian Law Awards
  • 2020 Employer of Choice Winner – Australasian Lawyer
  • 2021 Fastest Growing Law Firm - Financial Times APAC 500
  • 2021 Law Firm of the Year - Australasian Law Awards
  • 2020 Law Firm of the Year Finalist - Australasian Law Awards