57 N.J.Super. 278, 154 A.2d 625 (N.J.Super.A.D. 1959)
What this case teaches: Economic duress= physical duress.
-Wolfs contracted to buy land in a subdivision owned by Marlton.
-Wolfs paid a deposit.
-Before their house was finished, the Wolfs got a divorce, backed out of the deal and demanded their deposit back.
-When Marlton refused to give them a full refund, Mr. Wolf told Marlton that they would otherwise sell the land to an "undesirable" in order to lower the value of the neighborhood and make racists unlikely to buy houses in that subdivision.
-Marlton gave the deposit back and then sued to recover it.
-Marlton argued that the Wolfs' threats amounted to duress.
-The Wolfs' argued that it was perfectly legal for them to sell their house to whomever they wanted to, so how could doing something legal amount to duress?
The Court found that although it was technically legal for the Wolfs to sell their house to anyone they wanted to "duress is tested, not by the nature of the threats, but rather by the state of mind induced thereby in the victim."
-Economic duress is equivalent to physical duress and can make a contract unenforceable.
-Defendant was not physically prevented from enforcing the contract- the impress was the
same as if physical pressure had been exerted- defendant was effectively prevented from
enforcing the Wolfs to comply with the contract as if a more immediate form of coercion
had been employed.
-Acts or threats cannot constitute duress unless they are wrongful; but a threat may be
wrongful even though the act threatened is lawful.
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