Question

Aldrich and Co. sold goods to Donovan on credit. The amount owed grew steadily, and finally, Aldrich refused to sell any more to Donovan unless Donovan signed a promissory note for the amount due. Donovan did not want to but signed the note because he had no money and needed more goods. When Aldrich brought an action to enforce the note, Donovan claimed that the note was not binding because it had been obtained by economic duress. Was he correct?

(uses your own words)

Answer 1

Donovan was not correct because there was no substantial evidence of economic duress. Aldrich enforced the promissory note so as to get his dues owed by Donovan. Aldrich did not threaten the continuity of Donovan’s business by enforcing the promissory note. Donovan had an obligation of paying the full amount owed to Aldrich. For example, In Richard’s case vs.Katahdin Manufacturing Company, there was an economic duress when Richard refused to supply spare parts to Katahdin. In this case, Richard did not bind to the 2010 contract and forcedKatahdin to sign the 2011 contract which increased the percentage cost, for Richard to complete the 2010 supply. In Aldrich & Co. vs. Donovan, there were no economic duress and Donovan had an obligation of paying the due amount owed.