Summary
In Muller Constr. Co. v New York Tel. Co. (40 N.Y.2d 955, supra), the plaintiff sought a declaration of nullity as to a settlement agreement on the ground that it was induced by the defendant's threat to terminate their earlier contract, which gave the defendant the right to cancel on an architect's certificate of substantial breach.
Summary of this case from Edison Stone Corp. v. 42nd Street Development Corp.Opinion
Argued October 14, 1976
Decided November 18, 1976
Appeal from the Appellate Division of the Supreme Court in the Second Judicial Department, ROBERT J. TRAINOR, J.
Jonathan L. Rosner for appellants.
Arnold I. Roth for respondent.
MEMORANDUM. The order of the Appellate Division should be affirmed. A contract may be voided on the ground of economic duress where the complaining party was compelled to agree to its terms by means of a wrongful threat which precluded the exercise of its free will. (Austin Instrument v Loral Corp., 29 N.Y.2d 124, 130; Oleet v Pennsylvania Exch. Bank, 285 App. Div. 411.) Here, plaintiff alleged that the settlement agreement was induced by defendant's threat to terminate their earlier contract. The amended complaint and the affidavit in opposition to the motion to dismiss fail to allege that the defendant was not within its contractual rights in threatening to exercise the termination clause contained in the contract. Rather, it appears that the defendant, in the context of contractual dispute, preserved its rights by following the letter of the termination clause, while at the same time seeking an accommodation with the financially hard-pressed plaintiff. In view of the explicit provisions of the termination clause, which gave defendant the right to cancel the contract upon an architect's certificate of substantial breach, there is no possibility that the plaintiff could present evidence which would establish that the defendant's threatened cancellation was in excess of its contractual rights and, hence, was wrongful. The only reasonable inference that can be drawn from the complaint and the affidavits is that the plaintiff is unable to prevail.
Chief Judge BREITEL and Judges JASEN, GABRIELLI, JONES, WACHTLER, FUCHSBERG and COOKE concur.
Order affirmed, with costs, in a memorandum.