Contracts and Sales Multistate Bar Practice Exam

What are the essential elements of economic duress?

1. Offering a deal under time pressure

2. Threatening to commit a wrongful act and no adequate means to prevent loss

3. Withholding a promise that was previously agreed upon

4. Negotiating under severe financial stress

The correct answer is: Threatening to commit a wrongful act and no adequate means to prevent loss

The essential elements of economic duress center around coercive threats that induce a party to enter into a contract while undermining their free will. Specifically, one party must demonstrate that they were threatened with a wrongful act that would cause them significant harm, and that there were no adequate means available to avoid this harm. This wrongful threat must be material enough to compel the victim to agree to the contract against their better judgment. In this context, the focus on the threat of a wrongful act emphasizes the coercive nature of economic duress, wherein an individual is led to make decisions not based on their own volition but due to the pressure exerted by another party. The absence of adequate means to avert the loss bolsters the claim of economic duress, as it highlights the lack of alternatives available to the victim, reinforcing the argument that consent given under these circumstances is not genuine. The other options may involve coercive scenarios or pressure but do not capture the specific legal definition and essential elements of economic duress. For instance, simply offering a deal under time pressure does not necessarily involve a wrongful threat or coercion. Similarly, withholding a previously agreed-upon promise could indicate bad faith but does not meet the criteria of a threat of wrongful action. Negotiating