Threats of No Future Business Not Duress

Threats of No Future Business Not Duress

Description AT&T's threat not to do business in the future with a company that accused it of breach of contract held not to constitute a suit for duress, even if there was a breach of the current contract.

Topic Contracts

Key Words Duress, Breach

C A S E S U M M A R Y

Facts Strickland did cable work for AT&T for years. AT&T contracts were Strickland's major revenue source. On one project, the contract set Strickland's compensation as 23.5 percent of "total project cost," a term left to AT&T's definition. AT&T stated the total project cost to be $6.5 million, but one AT&T document indicated that it may have been $7.2 million. During a conflict over which sum was to be used, AT&T indicated that if Strickland wanted more business in the future, it should agree to the lower figure. Strickland sued for breach of contract and for economic duress.

Trial Court Decision The jury awarded Strickland $173,000 for breach (23.5 percent of the difference between the two project cost figures) and $470,601 damages on its economic duress claim. AT&T appealed.

Court of Appeals Decision The award for breach of contract affirmed; AT&T is entitled to judgment as a matter of law on the claim of economic duress. "In Oklahoma, economic duress allows a party to avoid a contract that it has entered if a 'wrongful act [of the other party was] sufficiently coercive to cause a reasonably prudent person faced with no reasonable alternative to succumb to the perpetrator's pressure...A litigant cannot, therefore, make out a claim of economic duress by alleging merely that the opposing party took advantage of her weak negotiating position or because of 'business necessities.'"

Citation Strickland Tower Maintenance, Inc. v. AT&T Communications, Inc., ---F.3d--- (1997 WL 686009, 10th Cir.)
or
128 F. 3d 1422 (10th Cir., 1997)

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Threats of No Future Business Not Duress
Description	AT&T's threat not to do business in the future with a company that accused it of breach of contract held not to constitute a suit for duress, even if there was a breach of the current contract.
Topic	Contracts
Key Words	Duress, Breach
C A S E S U M M A R Y
Facts	Strickland did cable work for AT&T for years. AT&T contracts were Strickland's major revenue source. On one project, the contract set Strickland's compensation as 23.5 percent of "total project cost," a term left to AT&T's definition. AT&T stated the total project cost to be $6.5 million, but one AT&T document indicated that it may have been $7.2 million. During a conflict over which sum was to be used, AT&T indicated that if Strickland wanted more business in the future, it should agree to the lower figure. Strickland sued for breach of contract and for economic duress.
Trial Court Decision	The jury awarded Strickland $173,000 for breach (23.5 percent of the difference between the two project cost figures) and $470,601 damages on its economic duress claim. AT&T appealed.
Court of Appeals Decision	The award for breach of contract affirmed; AT&T is entitled to judgment as a matter of law on the claim of economic duress. "In Oklahoma, economic duress allows a party to avoid a contract that it has entered if a 'wrongful act [of the other party was] sufficiently coercive to cause a reasonably prudent person faced with no reasonable alternative to succumb to the perpetrator's pressure...A litigant cannot, therefore, make out a claim of economic duress by alleging merely that the opposing party took advantage of her weak negotiating position or because of 'business necessities.'"
Citation	Strickland Tower Maintenance, Inc. v. AT&T Communications, Inc., ---F.3d--- (1997 WL 686009, 10th Cir.) or 128 F. 3d 1422 (10th Cir., 1997)