Legal Blog

Economic Duress

Elias v. Van Zanten 2019 Ont SCJ (MC)

Plaintiff provided financing for a corporation and insisted upon a guarantee from the corporation’s principal. When the corporation defaulted, the principal claimed that he was not liable on the guarantee because he signed it after economic duress. The Master noted that the plaintiff merely demanded the guarantee as a condition to the investment; there was no unlawful act or even a doubtful lawful act, such as threatening a breach of contract. There was no illegitimate pressure. Accordingly, there was no economic duress. The Master also noted that there was nothing unconscionable about the terms of the guarantee. The Master granted judgment.

Written by Jonathan Speigel, the founding partner of Speigel Nichols Fox LLP, leads the litigation and construction practices.