People often enter contracts under pressure, including economic pressure. Businesses bargain hard, and parties sometimes exploit the fact that others are in financial difficulty. Contract law has long struggled to say when this kind of pressure crosses a line. The problem is how to distinguish legitimate commercial pressure from impermissible economic duress: that is, when pressure renders a contract voidable rather than constituting strategic, even aggressive, bargaining that the law and ethical principles should accept. This article addresses the problem by offering a philosophical analysis of key cases and the widely used three-pronged test. We argue that duress lies not in the presence of psychological pressure or limited alternatives, but in whether the party applying pressure disqualified themselves from claiming contractual rights. This view, which we call Contextual Disqualification, offers a novel and improved account of economic duress that builds upon, but also advances, current legal doctrine. We ground this account in a neglected insight from early modern contract theorist Samuel Pufendorf and extend it by drawing on Stephen Darwall's view on the second-person standpoint.
Kiener et al. (Wed,) studied this question.