Bar Exam (Next Generation) Quiz: Duress And Undue Influence

12 questions · exam conditions

0:00

Duress And Undue InfluenceQuestion 1 of 12

Section 75 of the Model Contracts Act provides:

(a) If a party's assent is induced by an improper threat made by a third person who is not a party to the contract, the contract is voidable by the victim.

(b) A contract is not voidable under subsection (a) if, before the victim rescinds, the other party to the contract, in good faith and without reason to know of the threat, gives value or materially relies on the contract.

Rivera owned a painting that Sato, an art dealer, wanted to buy. Without Sato's knowledge or encouragement, Marco, a third person, threatened to harm Rivera's daughter unless Rivera signed a contract selling the painting to Sato for $400,000. Rivera signed. The next morning, before Rivera told anyone about the threat, Sato wired $400,000 to Rivera. When Rivera later learned of Marco's threat, he sued to rescind the sale.

Which of the following is most accurate?

Rivera may rescind because any contract induced by a third person's improper threat is voidable regardless of the other party's conduct.

Rivera may rescind because Sato's wire transfer was only the performance of a contractual duty, not the giving of value.

Rivera may not rescind because Sato gave the required consideration in good faith and without reason to know of the threat.

Rivera may not rescind because an improper threat by a nonparty to the contract can never affect the contract's validity.

← Back to quizzes

Bar Exam (Next Generation) Quiz

Bar Exam (Next Generation) Quiz: Duress And Undue Influence

Practice Duress And Undue Influence in Bar Exam (Next Generation) with focused quiz questions that help you check what you know, review explanations, and build confidence with test-style prompts.

What this quiz covers

This quiz focuses on Duress And Undue Influence, giving you a quick way to practice the rules, question types, and explanations that matter most for Bar Exam (Next Generation).

How to use this quiz

Try each quiz question before looking at the correct answer. Use the explanations to review missed ideas, then come back to similar questions until the pattern feels familiar.

All questions

Question 1

Section 75 of the Model Contracts Act provides:

(a) If a party's assent is induced by an improper threat made by a third person who is not a party to the contract, the contract is voidable by the victim.

Which of the following is most accurate?

Rivera may rescind because any contract induced by a third person's improper threat is voidable regardless of the other party's conduct.
Rivera may rescind because Sato's wire transfer was only the performance of a contractual duty, not the giving of value.
Rivera may not rescind because Sato gave the required consideration in good faith and without reason to know of the threat. (correct answer)
Rivera may not rescind because an improper threat by a nonparty to the contract can never affect the contract's validity.

Explanation: Whenever you see a third-party threat or duress question, focus on two things: whether the contract is voidable, and whether the innocent counterparty has acted before rescission. Under Section 75(a), an improper threat by a nonparty makes the contract voidable by the victim. But Section 75(b) creates a crucial exception: if the other party, in good faith and without reason to know of the threat, gives value or materially relies before the victim rescinds, the contract is no longer voidable. Here, Rivera signed under Marco's threat, so the contract was initially voidable. But Sato wired the $400,000 the next morning, before Rivera told anyone or rescinded. Sato acted in good faith and had no reason to know of the threat. Section 75(c) expressly says "gives value" includes paying all or part of the required consideration, so Sato's wire transfer qualifies. Therefore Rivera may not rescind. The claim that any contract induced by a third person's threat is voidable "regardless of the other party's conduct" ignores the statutory exception. The claim that the wire transfer was "only performance of a contractual duty, not giving of value" misreads subsection (c), which defines payment of consideration as giving value. And the claim that a nonparty's threat "can never affect" validity contradicts subsection (a), which makes the contract voidable in the first place. Study tip: in duress questions, after spotting initial voidability, always check whether the innocent party gave value or relied before rescission—that timing often decides the outcome.

Question 2

Section 76 of the Model Contracts Act provides:

(a) A threat to institute or cause criminal prosecution is an improper threat.

(b) A threat to report a suspected crime to law enforcement is not improper if the person making the threat reasonably believes the crime occurred and seeks only to obtain restitution for the loss caused by the crime or to prevent further crime.

Nora, owner of a small store, discovered that Paul, an employee, had taken $20,000 from the cash register. At a meeting, Nora said, 'If you sign a promissory note for $20,000 payable to the store, I will not call the police. If you refuse, I will call them today.' Paul signed the note. He later seeks to avoid it on grounds of duress.

Which of the following is correct?

The note is voidable because a threat to call the police to report a crime is always an improper threat.
The note is voidable because Nora threatened to cause criminal prosecution, not merely to report a crime.
The note is enforceable because Nora reasonably believed Paul committed the theft and sought only repayment of the amount stolen. (correct answer)
The note is enforceable because a person who committed a crime may not assert duress to avoid a contract.

Explanation: When you see a duress question involving a threat to report a crime, focus on the exception in Section 76(b): a threat to report is improper only if it seeks something beyond restitution or crime prevention. Here, Nora threatened to call the police, not to institute prosecution, and her demand was exactly the $20,000 Paul stole. Because she reasonably believed Paul committed the theft and sought only repayment, her threat falls squarely within the exception. The note is therefore enforceable. The choice claiming that a threat to call the police is always improper ignores the statutory exception—it is not absolute. The choice saying Nora threatened to cause criminal prosecution misreads the facts: calling the police is reporting, not prosecuting, and even if it were prosecution, her purpose was restitution, so it would still be permissible. Finally, the idea that a criminal cannot assert duress is a misconception—any party can raise duress if the threat itself is improper, but here it was not. Your takeaway: on questions about economic duress, always ask what the threat seeks. If the demand is limited to restitution or preventing further harm, the threat is proper—even if it involves reporting a crime. Watch for the distinction between a threat to report (proper) and a threat to prosecute (improper) unless restitution is the goal.

Question 3

Dana, an accounts-payable clerk, embezzled $15,000 from EZ Corp. When EZ's CFO confronted her, he said: If you don't sign this promissory note for $60,000—$15,000 restitution plus $45,000 for our investigation costs and reputational harm—I will call the police and the district attorney. Dana signed immediately, without consulting counsel, because she feared arrest and prosecution. EZ's actual additional accounting and investigation costs were $2,000; the $45,000 figure had no supporting documentation. EZ later sued Dana on the note, and Dana raised duress.

Relevant provision, Section 5 of the Model Civil Settlement Act:

(a) A transaction is voidable for duress if a party's assent was induced by a threat to institute or to cause the institution of a criminal prosecution and the threat was made to obtain an advantage in a private transaction.

(b) Subsection (a) does not apply if the threat's primary purpose was to obtain restitution of, or compensation for, a loss caused by the criminal conduct and the amount demanded was reasonably related to that loss.

(c) A person threatened with prosecution has no reasonable alternative to assenting if the threat creates a substantial risk of incarceration or other severe consequences.

Under the Act, how should the court rule on Dana's duress defense?

The note is enforceable, because Dana actually embezzled $15,000 and EZ could lawfully have reported her to the authorities.
The note is voidable, because the threat was made to obtain a private advantage and the $60,000 demand was not reasonably related to EZ's loss. (correct answer)
The note is enforceable, because EZ's primary purpose was to obtain restitution for a crime and subsection (b) does not require the amount demanded to be reasonably related to the loss.
The note is voidable only if Dana proves she was innocent of the embezzlement, because a guilty person cannot claim duress from a truthful threat of prosecution.

Explanation: Whenever you see a duress defense based on a threat of prosecution, resist the urge to focus only on whether the victim actually committed the crime. Under the Act, enforceability turns on how the threat was used: was it to secure legitimate restitution, or to leverage an excessive private advantage? Here the CFO's threat to call police and DA induced Dana's assent, and subsection (c) makes a threatened person's fear of incarceration a "no reasonable alternative" situation. That brings the transaction within subsection (a) as prima facie voidable. The only escape is subsection (b): a threat is not duress if its primary purpose was restitution/compensation for the criminal loss and the amount demanded was reasonably related to that loss. EZ's actual loss was $17,000—$15,000 embezzled plusounded $2,000 actual investigation costs—but the note demanded $60,000, with a unsupported $45,000 padding for “investigation costs and reputational harm.” That amount was not reasonably related to the loss, so subsection (b) does not remove duress. The transaction is therefore voidable. The choice arguing enforceability because Dana actually embezzled and EZ could lawfully report her misses the point: actual guilt does not immunize an overreaching threat; the exception requires reasonable relationship, not mere lawfulness of the report. The choice claiming EZ's primary purpose was restitution and subsection(b) does not require reasonable relationship misreads the statute: subsection(b) explicitly requires the amount demanded be reasonably related to the loss, and the unsupported $45,000 shows the purpose was partly private advantage. The choice requiring Dana to prove own innocence to claim duress also inverts the Act: duress can protect even a guilty person when criminal process is threatened to extract an excessive private gain. Focus on whether the threat sought an amount reasonably related to actual loss. If it did not, the note is voidable.Whenever you see a duress defense based on a threat of prosecution, resist the urge to focus only on whether the victim actually committed the crime. Under the Act, enforceability turns on how the threat was used: was it to secure legitimate restitution, or to leverage an excessive private advantage? Here the CFO's threat to call police and DA induced Dana's assent, and subsection (c) makes a threatened person's fear of incarceration a "no reasonable alternative" situation. That brings the transaction within subsection (a) as prima facie voidable. The only escape is subsection (b): a threat is not duress if its primary purpose was restitution/compensation for the criminal loss and the amount demanded was reasonably related to that loss. EZ's actual loss was $17,000—$15,000 embezzled plusounded $2,000 actual investigation costs—but the note demanded $60,000, with an unsupported $45,000 padding for “investigation costs and reputational harm.” That amount was not reasonably related to the loss, so subsection (b) does not remove duress. The transaction is therefore voidable. The choice arguing enforceability because Dana actually embezzled and EZ could lawfully report her misses the point: actual guilt does not immunize an overreaching threat; the exception requires reasonable relationship, not mere lawfulness of the report. The choice claiming EZ's primary purpose was restitution and subsection(b) does not require reasonable relationship misreads the statute: subsection(b) explicitly requires the amount demanded be reasonably related to the loss, and the unsupported $45,000 shows the purpose was partly private advantage. The choice requiring Dana to prove own innocence to claim duress also inverts the Act: duress can protect even a guilty person when criminal process is threatened to extract an excessive private gain. Focus on whether the threat sought an amount reasonably related to actual loss. If it did not, the note is voidable.

Question 4

Walter, age 82, relied on his live-in caregiver, Nina, to manage his medications, drive him to appointments, and handle his mail. He had no close relatives. At Nina's suggestion, Walter met with Attorney Lee to sign a contract conveying his house to Nina in exchange for Nina's promise to care for Walter for the rest of his life. Before the meeting, Nina prepared a list of reasons Walter should give for the transfer and rehearsed him in reciting them. During the meeting, Walter repeated those reasons almost verbatim. Attorney Lee did not know that Nina had prepared the list, did not advise Walter to seek independent counsel, and Nina was not present at the signing. Walter later seeks to set aside the contract for undue influence.

Excerpt from Chen v. Albright: An agreement is voidable for undue influence when the weaker party's assent was obtained by unfair persuasion that overcame the weaker party's free will. If the stronger party stood in a confidential relationship with the weaker party and suspicious circumstances surround the transaction, a presumption of undue influence arises. The burden then shifts to the stronger party to prove by clear and convincing evidence that the weaker party acted freely. The presumption may be rebutted by showing that the weaker party received independent advice from counsel who was fully informed and who advised against the transaction, or that the weaker party's decision was the product of the weaker party's own considered judgment despite the relationship.

Under Chen v. Albright, should Walter's challenge to the contract succeed?

Yes, because a paid caregiver who receives property from a dependent elderly person is conclusively presumed to have exerted undue influence.
Yes, because Nina's confidential relationship with Walter and the rehearsed reasons create a presumption of undue influence that Nina has not rebutted. (correct answer)
No, because Nina was not present when Walter signed and Walter met alone with Attorney Lee, so no undue influence occurred at the decisive moment.
No, because Walter gave Attorney Lee specific reasons for the transfer, showing that the decision was the product of his own considered judgment.

Explanation: When you see an undue influence question on the bar exam, your first task is to determine whether a presumption arises. Under Chen v. Albright, that presumption springs from a confidential relationship plus suspicious circumstances. Here, Nina was Walter's live-in caregiver managing his medications, mail, and appointments—a textbook confidential relationship with a dependent elderly person. The rehearsed reasons Walter recited verbatim constitute highly suspicious circumstances. This triggers the presumption, shifting the burden to Nina to prove by clear and convincing evidence that Walter acted freely. She cannot satisfy that burden. Attorney Lee was not fully informed—he didn't know Nina had scripted the reasons—and he never advised Walter against the transaction, so the independent-advice defense fails. Nor was Walter's decision his own considered judgment, because he was merely parroting Nina's script. Therefore, the challenge succeeds. The choice stating a paid caregiver is conclusively presumed to exert undue influence is wrong because the presumption is rebuttable, not conclusive. The choice arguing that Nina's absence at signing negates undue influence misses the point—influence can be exerted through preparation and rehearsal before the decisive moment. Finally, the choice claiming Walter's specific reasons prove his own judgment ignores that those reasons were dictated by Nina, so they cannot reflect his free will. For your strategy: when you see "caregiver" plus "rehearsed" or "isolated from family," immediately think "presumption of undue influence." Then ask: did the stronger party rebut it with truly independent counsel or a genuine independent decision? If not, the contract fails. Remember, "conclusive" is a trap word—these presumptions are almost always rebuttable.

Question 5

For 25 years, Attorney Chen handled all legal and financial matters for Helen, a wealthy widow. After Helen's husband died, Chen became her closest advisor. He prepared a contract under which Helen agreed to sell him her lake house for $80,000, although he knew it was worth $250,000. Chen did not advise Helen to obtain an independent appraisal or legal advice, and she signed. She later wants to rescind.

Which legal issue is most significant in evaluating Helen's claim?

Whether the contract is voidable for undue influence because Chen was in a confidential relationship with Helen and may have overreached. (correct answer)
Whether the contract is voidable for duress because Chen threatened to withdraw from representing Helen if she refused to sell.
Whether the contract is void for mutual mistake because both parties were unaware of the house's actual market value.
Whether the contract is unenforceable for lack of consideration because $80,000 was far below fair market value.

Explanation: When you see a contract involving a fiduciary or trusted advisor and a deal that seems unfair, think about the defense of undue influence. The key is whether a confidential relationship existed and whether the dominant party overreached. Here, Chen was Helen's attorney and closest advisor for 25 years, handling all her legal and financial matters. He prepared the contract himself, knew the house was worth $250,000, paid only $80,000, and did not urge her to seek independent appraisal or counsel. This combination—a confidential relationship plus a grossly unfair bargain—creates a presumption of undue influence, making the contract voidable at Helen's option. That is the most significant issue. The duress choice fails because there is no threat or coercion; nothing suggests Chen threatened to withdraw his representation if she refused. The mutual mistake choice is wrong because Chen knew the true value—only Helen was mistaken, which is not mutual. The lack of consideration choice misstates the law: $80,000 is legally sufficient consideration, and courts generally do not examine adequacy unless combined with other wrongdoing. Your strategy: whenever you see a fiduciary relationship (attorney, guardian, trustee) and a transaction that is unusually favorable to the fiduciary, immediately suspect undue influence. Distinguish it from duress (which requires an explicit threat) and from mere inadequacy of price (which alone is not a defense). Remember that a presumption of undue influence can be rebutted, but here the facts strongly support Helen's claim.

Question 6

Marta, 82, is mentally alert but physically dependent on her neighbor Rosa, who brings her meals, drives her to appointments, and manages her medications. Marta has no family nearby and trusts Rosa completely. Over several months, Rosa repeatedly told Marta that a grateful person would "show love" by selling Rosa her house for $60,000, roughly half its market value. Marta eventually signed the sales contract. She now wants to rescind.

Which legal ground is most likely to support Marta's rescission?

Fraud, because Rosa failed to tell Marta that the house was worth twice the contract price.
Duress, because Rosa's repeated demands implicitly threatened to stop providing care if Marta refused.
Undue influence, because Rosa exploited a relationship of trust and dependence to overcome Marta's free will. (correct answer)
Lack of mental capacity, because Marta was elderly and relied on Rosa for daily assistance.

Explanation: This question tests the distinction among contract-formation defenses. When a party in a relationship of trust and dependence is pressured into unfair terms, your first instinct should be undue influence. Undue influence arises when a dominant party exploits a confidential relationship—such as caregiver and patient—to override the weaker party's free will. Rosa controlled Marta's daily care, had Marta's complete trust, and repeatedly pushed her to sell a valuable house for half its value. That combination of trust, dependence, and unfair persuasion is exactly the classic case for rescission. Fraud is not the best ground because Rosa did not make a false factual statement; her "show love" language was emotional pressure, and nondisclosure of value, while potentially suspicious, is not the central theory. Duress is also weaker: true duress requires an improper threat, usually of physical or economic harm, and the facts show manipulation and exploitation rather than an explicit or implied threat to stop care. Lack of mental capacity fails because Marta is expressly described as mentally alert; being elderly and dependent on assistance does not mean incompetent. Study tip: if you see a caregiver, trusted adviser, or other fiduciary who gains an unfair benefit through persistent persuasion, choose undue influence. Save duress for threats, fraud for false statements, and capacity for cognitive impairment.

Question 7

Dante owed $15,000 to Vinny, a lender. When Dante missed a payment, Vinny told Dante that if Dante did not sign a document giving Vinny an option to buy Dante's house for $10,000, Vinny would have Dante's brother beaten. Dante signed. He later wants to rescind the option.

Which legal ground is most likely to support Dante's rescission?

Unconscionability, because the option price was far below the house's market value.
Duress, because Vinny's threat of physical harm to Dante's brother overcame Dante's will. (correct answer)
Fraudulent transfer, because Dante transferred an interest in his house to prevent Vinny from collecting the debt.
Illegality, because Vinny was not licensed to make the loan and the debt was therefore unenforceable.

Explanation: Whenever you see a question about rescinding a contract, think about the defenses to contract formation: duress, undue influence, fraud, unconscionability, and illegality. The key is to identify the specific wrongful conduct that pressured the party to sign. Here, Vinny threatened to have Dante's brother beaten unless Dante signed the option. That is a classic wrongful threat of physical harm, and it directly induced Dante's signature. Duress does not require that Dante's "will" be completely destroyed; it is enough that the threat left him no reasonable alternative but to comply. Because the threat targeted Dante's brother, it is still duress—the harm threatened was to a close family member, and that is sufficient to support rescission. The unconscionability choice misses the point: a low option price alone does not make a contract unconscionable, and the real defect here is the improper threat, not just unfairness. The fraudulent transfer choice is wrong because fraudulent transfer law involves hiding assets from creditors; Dante gave Vinny an option, not a concealment of property, and rescission is governed by contract defenses, not fraudulent conveyance. The illegality choice fails because there is no fact in the passage that Vinny lacked a license or that the loan was unenforceable. Study tip: when a question presents a threat, choose duress even if the bargain also looks unfair. Unconscionability is about shocking terms plus unfair process, while duress is about wrongful pressure.

Question 8

Section 74 of the Model Contracts Act provides:

(a) A party may avoid a contract if the party's assent was induced by an improper threat by another party and the threat left the party no reasonable alternative to assenting.

(b) A threat is improper if the threatened act is a crime or tort, if the threat is to use civil process in bad faith, or if the threatened act would violate the duty of good faith and fair dealing.

(c) A threat to breach a contract is improper under subsection (b)(iii) only if made in bad faith and the threatened breach would leave the victim without an adequate remedy.

AlloyWorks had a one-year contract to sell Technicorp 10,000 custom casings per month at $20 each. With six months remaining, AlloyWorks demanded that Technicorp pay $30 per casing and said it would stop deliveries unless Technicorp agreed. AlloyWorks's costs had not risen; it simply wanted higher profits. Technicorp's purchasing manager verified that a competitor could produce identical casings at $23 per casing, with a two-week setup period and enough capacity to meet Technicorp's needs. Fearing any interruption, Technicorp agreed to the increase. Technicorp later sued to avoid the modification for duress.

Should the court allow Technicorp to avoid the modification?

Yes, because AlloyWorks acted in bad faith, and a bad-faith threat to breach a contract is a sufficient basis for duress.
Yes, because Technicorp agreed only to avoid a breach and had no adequate remedy for the threatened interruption.
No, because a threat to breach a contract, even one made in bad faith, is not an improper threat.
No, because Technicorp had a reasonable alternative to accepting the increase and therefore cannot show duress. (correct answer)

Explanation: When you see a duress question, remember the statute requires two things: an improper threat and no reasonable alternative to assenting. For threats to breach a contract, there's an extra hurdle—the threat is improper only if made in bad faith and the threatened breach would leave the victim without an adequate remedy. Here, Technicorp fails both prongs. Because a competitor could produce identical casings at $23 per casing with sufficient capacity within two weeks, Technicorp had a reasonable alternative to accepting the price hike: it could cover and recover damages from AlloyWorks. Covering at $23 costs more than the original contract, but it is still a practical substitute and far less than the demanded $30. Thus Technicorp cannot show "no reasonable alternative." The same fact also shows the threatened breach would not leave Technicorp without an adequate remedy, because damages—the extra cost of cover—would suffice. So although AlloyWorks acted in bad faith, thead faith alone isn't enough. The choice saying "Yes, because AlloyWorks acted in bad faith, and a bad-faith threat to breach a contract is a sufficient basis for duress" is wrong: it ignores both the adequate-remedy requirement and the reasonable-alternative requirement. The choice saying "Yes, because Technicorp agreed only to avoid a breach and had no adequate remedy" is also wrong: the interaction fear does not create duress when a substitute supplier was available, anded "no adequate remedy" is contradicted by the cover option. The choice saying "No, because a threat to breach a contract, even one made in bad faith, is not an improper threat" is too broad: such a threat can be improper under subsection (b)(iii), but only when it is made in bad faith andand leaves the victim without an adequate remedy—neither true here. The correct result is no, but for the reason that a reasonable alternative existed. On the exam, when duress is claimed, always ask: Was there an objective, practical way out—like covering from another seller—even if it cost money or caused inconvenience? If yes, duress fails.

Question 9

Rico contracted with Apex Builders to renovate his restaurant. The written contract set a price of $120,000 and required completion by August 1. In July, Apex told Rico that because its material costs had risen, it would stop work unless Rico agreed to pay an additional $40,000; in return, Apex would install a new HVAC system that was not part of the original contract. Rico had no time to find another contractor before his scheduled opening and signed the amendment. Apex installed the HVAC and completed the renovation. Rico later refused to pay the extra $40,000, and Apex sued.

Which legal issue is most significant in determining whether Rico must pay the additional $40,000?

Whether the amendment is unenforceable for lack of consideration because the original contract already obligated Apex to complete the renovation.
Whether the amendment is voidable for unconscionability because $40,000 was far more than the cost of the HVAC system.
Whether the amendment is voidable for duress because Apex threatened to breach the existing contract and Rico had no reasonable alternative. (correct answer)
Whether the amendment is voidable for unilateral mistake because Apex's material costs had risen after the original bid.

Explanation: When you see a contract modification that adds money to a deal already in progress, immediately think about the preexisting duty rule and its exceptions. A promise to do what you are already contractually obligated to do is not new consideration, but a modification can still be enforced if it is supported by new consideration or is protected from defenses like duress. Here, the most significant issue is duress. Apex threatened to walk off the job unless Rico paid an extra $40,000, even though Apex was already required to complete the renovation. Rico had no reasonable alternative because his scheduled opening gave him no time to find another contractor. That is classic economic duress: a wrongful threat to breach, leaving the other party with no practical choice but to agree. Therefore, the amendment is voidable, and Rico may not have to pay the extra amount. The lack-of-consideration argument is tempting, but the amendment did add something new: installation of an HVAC system that was not in the original contract. That new performance is consideration, so the preexisting duty rule alone does not defeat the amendment. The unconscionability choice focuses only on the $40,000 price gap; while the amount may seem excessive, duress—not unconscionability—explains why the modification was obtained unfairly. The unilateral mistake choice is also wrong: Apex's rising material costs were its own business risk, not a mistake about a basic assumption that Rico caused or knew about. On exam day, when a party demands more money under threat of nonperformance, choose duress if the other party had no realistic alternative.

Question 10

Evelyn, 90, a lifelong member of a small church, became deeply dependent on Pastor Green after her husband died. Pastor Green visited her weekly and handled her charitable donations. He began telling Evelyn that God had told him she must sell her rental property to the church for $10,000, or she would suffer eternal damnation. Evelyn, terrified, signed the sales contract. Her heirs now want to rescind.

Which legal ground is most likely to support setting aside the contract?

Duress, because Pastor Green threatened Evelyn with a concrete, immediate harm if she refused to sign.
Undue influence, because Pastor Green used his spiritual authority to exploit Evelyn's fears and dependence. (correct answer)
Fraud, because Pastor Green's statement that God had spoken to him was false.
Lack of mental capacity, because Evelyn's fear of eternal damnation made her unable to understand the transaction.

Explanation: Whenever you see a question about rescinding a contract based on something done to a vulnerable party, think about the relationship between the parties and the nature of the pressure. Duress, undue influence, fraud, and lack of capacity all attack consent, but each requires a different kind of wrongdoing. Here, the strongest ground is undue influence. Pastor Green occupied a position of spiritual authority over Evelyn, who was elderly, grieving, and dependent on him. He exploited that confidence and her terror of eternal damnation to push her into a transaction that overwhelmingly benefited his church at her expense. That is the classic pattern: a confidential relationship, pressure that preys on vulnerability, and an unfair result. Duress is wrong because it requires a wrongful threat of concrete, imminent harm—typically physical or economic. A threat of damnation is spiritual and not the kind of immediate harm duress covers. Fraud fails because Pastor Green's statement about God speaking to him is a religious assertion, not a factual misrepresentation the law can verify. Lack of mental capacity is also incorrect: Evelyn likely understood the contract's basic nature—selling her property for $10,000—but was simply overborne by fear. That is not incapacity; it is undue influence. On the bar exam, when you see an advisor, caregiver, or clergy member profiting from a dependent person's fear, reach for undue influence before duress. Ask: did the defendant exploit a special relationship of trust? That is the hallmark.

Question 11

CanCo had a two-year contract to sell PackCo all of the metal cans that PackCo required at $0.10 per can. Six months into the term, CanCo's raw-material costs rose sharply. CanCo told PackCo that unless PackCo agreed to pay $0.13 per can immediately, CanCo would stop all deliveries. CanCo's plant manager later admitted in a deposition that he knew the contract's price was fixed and that the threat to stop deliveries was a negotiating tactic to force a higher price. PackCo had only one week of can inventory; no alternative supplier could begin deliveries for three months; and losing its largest customer would likely force PackCo out of business. PackCo signed the price increase under protest and later sued to set aside the modification.

Relevant provision, Section 3 of the Model Commercial Modification Act:

(a) A modification of an existing contract is voidable for duress if the party seeking the modification used an improper threat and the other party had no reasonable alternative but to assent.

(b) A threat is improper if it is a threat to withhold a performance that is due under the existing contract and the threatening party has no objectively reasonable basis for believing that the demanded concession is owed.

(c) A party has an objectively reasonable basis only if, at the time of the threat, the party actually and reasonably believed that the contract, fairly read, required the demanded change or excused the threatened withholding.

Under the Act, will PackCo prevail in setting aside the modification?

Yes, because CanCo's threat to stop deliveries was an improper threat and PackCo had no reasonable alternative to signing. (correct answer)
Yes, because any threat to withhold performance that is due under an existing contract is inherently improper.
No, because PackCo signed the modification voluntarily, even if reluctantly, and received the continued deliveries it sought.
No, because CanCo's increased raw-material costs gave it a reasonable basis to demand a higher price even though the contract did not expressly allow one.

Explanation: Whenever you see a modification signed under protest, your antenna should go up for duress. Under Section 3, PackCo must show both an improper threat and no reasonable alternative to assenting. Both are met here. CanCo threatened to stop delivering cans that the contract already required it to sell at a fixed price. That threat was improper because CanCo had no objectively reasonable basis for believing the price increase was owed; indeed, its plant manager admitted the contract price was fixed and the threat was merely a negotiating tactic. On the other side, PackCo had no reasonable alternative: it had only one week of inventory, no substitute supplier could deliver for three months, and refusing would likely put it out of business. So the modification is voidable for duress. The idea that any threat to withhold performance thatis due is inherently improper goes too far; under the Act, a withhold performance can be proper if the party actually and reasonably believed the contract excused it. Nor does it matter that PackCo signed voluntarily, even if reluctantly; the whole point of duress is that apparent consent is not real consent when extracted by an improper threat and no feasible way to resist. Finally, CanCo's increased raw-material costs do not supply a reasonable basis; the contract price was fixed, and the manager admitted he knew the contract did not require the increase — soaring costs may make performance unprofitable, but theydo not rewrite a fixed-price contract under this Act. So PackCo prevails. On exam day, spot duress cases by asking: was the threat improper, and did the victim have real-world options? A party's own admission often seals the answer.

Question 12

Nina discovered that her business partner, Victor, had embezzled $20,000 from their company. She told Victor, "If you do not sell me your vacation cabin for $50,000, I will report the embezzlement to the police." The cabin is worth about $150,000. Victor, afraid of prosecution, signed the contract. He now wants to rescind.

Which legal ground is most likely to support Victor's rescission?

Duress, because Nina used the threat of criminal prosecution to obtain a property advantage unrelated to the embezzlement. (correct answer)
Fraud, because Nina did not disclose that the cabin was worth three times the contract price.
Illegality, because the contract had the purpose and effect of concealing Victor's embezzlement from law enforcement.
Unconscionability, because the price was grossly inadequate and Victor signed under extreme emotional distress.

Explanation: Whenever you see a rescission question built on a threat, your first instinct should be to examine the pressure for impropriety: did the person threaten a wrongful act, and was the demand unrelated to any legitimate claim? That is the heart of duress. Here, Nina threatened to expose Victor's embezzlement to police unless he sold her a $150,000 cabin for $50,000. Threatening criminal prosecution is inherently coercive, and demanding a property advantage separate from the embezzled amount is exactly the kind of overreach that strips away Victor's meaningful choice. His fear was reasonable, and the contract was signed under that unlawful pressure. Now test the other options. The fraud claim fails because Nina never made a misrepresentation; mere silence about the cabin's value is not actionable unless a fiduciary duty to disclose exists, and none does. The illegality argument is tempting but misreads the bargain—Victor wasn't paying Nina to hide the embezzlement; he was selling property at a low price, and the contract itself does not further an illegal purpose. Finally, unconscionability is a closer call because the price is grossly inadequate and Victor was distressed, but this doctrine focuses on unfair terms plus procedural unfairness. Duress is more direct and decisive because the wrongful threat itself is the lever that produced the deal. Your study tip: when a party uses a lawful threat (like reporting a crime) to obtain an unrelated benefit, treat that as duress—it turns an otherwise lawful report into an improper bargaining weapon. Watch for that pattern on the bar.