Newspaper article THE JOURNAL RECORD

Doctrine of Economic Duress Valid under Oklahoma Law / Rules State Supreme Court

Newspaper article THE JOURNAL RECORD

Doctrine of Economic Duress Valid under Oklahoma Law / Rules State Supreme Court

Article excerpt

The doctrine of economic duress may be used under Oklahoma law to invalidate settlement agreements or enforce contracts, according to a landmark Oklahoma Supreme Court brief filed Tuesday.

The brief represents the first time the theory of economic duress has been addressed under state law.

Although Oklahoma courts have never used the specific nomenclature "economic duress," the state has acknowledged that contracts may be avoided because of economic duress/business compulsion, the justices said.

"It is apparent that Oklahoma has long recognized economic duress as a valid basis for avoiding a mutual release and settlement agreement," the brief said.

Economic duress would be present in a settlement that was reached as a result of one party coercing the other to agree and in turn, gaining an advantage, the court said.

The brief was filed in answer to federal certified questions presented to the Supreme Court by the U.S. 10th Circuit Court of Appeals. The federal appellate court is reviewing a case where Centric Corp. of Denver alleged Morrison-Knudsen Co., construction manager for the Oklahoma City General Motors Corp. Assembly Plant, forced Centric to settle a claim under economic duress.

Centric alleged Morrison-Knudsen caused delays in the performance of a contract which cost the Denver contractor about $3.4 million. Centric demanded losses of $2.2 million be reimbursed, but claimed it was offered a "take it or leave it" settlement of $1.4 million. Centric alleged Morrison-Knudson was aware of the contractor's financial condition when the settlement offer was made.

Facing bankruptcy, Centric accepted the offer and in exchange agreed to release its claims. …

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