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Authored - NJ Contract Law Update - The Contractual Defense of Duress: The "Horse" Cases
MAY 17, 2012 | Windels Marx - Commercial Litigation

In DMS Farm, LLC v. Nelson, 2012 WL 1328600 (N.J.App.Div. April 9, 2012), the Appellate Division further clarified and limited the law of duress as a defense to a contractual obligation. Specifically, DMS Farm clarified that a contracting party granted a lien by law on the property which is the subject of a contract cannot be accused of duress by exercising that lien:

  • It is not duress to enforce a legal right under a valid artisan's or mechanics lien or other similar lien against property that permits the detention of property as an appropriate method of enforcement of the lien. [p*3, quoting Williston on Contracts.].

As a cautionary note, attorneys exercising a retaining lien at an inopportune moment may well experience a slightly different reception. See Frenkel v. Frenkel, 252 N.J.Super. 214 (App.Div.1991).

DMS Farm arose in the context of the boarding of horses; thus naturally calling to mind a far more famous "horse" duress case, Continental v. Barclay Riding Academy, 93 N.J. 153 (1983).1 Continental established the broader proposition that the duress defense is available only when to obligee is the cause of obligor's underlying distress. Where an obligor resists a contractual obligation because of his/her/its own distress that arose independent of putative misconduct by the obligee, the obligee ordinarily is fully entitled to collect its debt notwithstanding allegations of "duress".

In this author's experience, parties often allege a broader form of duress than is allowed by Continental; and sometimes courts let them get away with such allegations, at least at the pleadings stage. However, forceful and incisive application of Continental should usually eliminate that issue before trial.

Contact & Legal Disclaimer

Clark Alpert is the author of Guide to New Jersey Contract Law, published by the New Jersey Institute for Continuing Legal Education, originally published in 2007 and updated in November 2011. His updates on New Jersey contract law are based in recent issues and practical methods for addressing similar situations in your practice or business. They are not intended to serve as legal advice. Clark welcomes your questions and comments.

 


1 Which--notwithstanding the title--actually had precious little to do with horses.





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