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New Jersey Superior Court, Appellate Division - 154 A.2d 625, 57 N.J. Super. 278
tl;dr:
A couple wanted to get out of a contract for a new home, so they threatened the builder that they would sell the home to an undesirable purchaser if they were forced to go through with it. The builder was able to argue that the threat constituted duress.Video Summary
Case Summary
In 1959, the Superior Court of New Jersey, Appellate Division, decided the case of Wolf v. Marlton Corp., which centered around a claim of duress and breach of contract. The Wolfs, a couple planning to buy a house from Marlton Corp., later chose not to proceed with the purchase due to marital problems. The Wolfs' lawyer used threatening tactics with Marlton in an attempt to cancel the contract and recover the deposit paid. Feeling threatened, Marlton agreed to cancel the contract but kept the deposit as compensation. Subsequently, the Wolfs sued Marlton for breach of contract and demanded their deposit back.
The trial court favored the Wolfs, but the appellate court reversed the decision, holding that the issue was not a breach of contract by Marlton, but rather duress by the Wolfs. The court adopted a broad test for duress, which included wrongful acts or threats that overpowered the other party's free will. The court deemed the lawyer's threats as wrongful despite being legal, as they constituted an abuse of legal remedies and immorality. The decision also confirmed that the threats caused fear and coercion in Marlton, leading them to unwillingly agree to cancel the contract.
This case was significant as it set a new standard for duress in New Jersey, expanding its definition beyond physical force or violence and emphasizing that the impact of the act or threat on the victim's mind should be the focus – not the nature or legality of the act or threat itself.
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The defendant builder was sued by the plaintiffs to recover a deposit of $2,450 after the sale of a house fell through. The County Court ruled in favor of the plaintiffs, but the builder appealed. The contract stated that if the buyer failed to make additional payments, the seller could retain the deposit as compensation for expenses. However, the trial judge concluded that the builder was required to give notice of the closing in, which they did not do. The defendant's claim of the buyers' attorney being notified of the closing in was not enough to prove their case. The doctrine of estoppel applies. The alternative ground for reversal is that the buyers breached the agreement of sale by threatening to resell the house to an undesirable purchaser and ruin the defendant's building business if the contract was carried out. The appellant's argument lacks a systematic development of the factual basis. The plaintiffs' attorney informed the defendant's sales agent that the plaintiffs wanted to get their money back due to certain problems. During a conversation with the plaintiffs' attorney, the defendant threatened to ruin their business and reputation if they did not accept his settlement offer of $450. The plaintiffs felt threatened and believed that they had no choice but to accept the offer. Despite the conversation, the defendant did not follow through with any legal action, and the plaintiffs did not notify anyone about the conversation. The lower court's ruling in favor of the plaintiffs was correct.
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