ContractsProf Blog

Editor: Myanna Dellinger
University of South Dakota School of Law

Thursday, January 25, 2018

Adequate counsel and time to consider terms defeats claims of fraud and duress

A recent case out of the Northern District of Illinois, Washington v. Board of Education of the City of Chicago, No. 17 CV 2343 (behind paywall), tackles, among other things, fraud and duress in the context of enforcing a settlement agreement. Washington worked for the defendant. After a dispute arose between the parties, they entered into a settlement agreement. Washington now seeks to declare the settlement agreement unenforceable on a number of grounds. 

First, Washington alleged fraud on the part of the defendant, alleging a number of misrepresentations and intentional omissions in the agreement. But the defendant argued that Washington's reliance on the alleged statements and omissions wasn't reasonable and further that it had no duty to disclose any information to Washington, which the court agreed with. Washington had her own counsel; had three weeks to consider the agreement; and had seven days after signing within which she could revoke the agreement. Since she had adequate counsel and time to consider the terms, the court found that Washington could not allege that the settlement agreement was procured by fraud. 

Second, Washington alleged duress because she feared for the termination of her job and "a humiliating public hearing." The board argued that Washington had alternatives to signing the agreement, and in fact those alternatives would have entitled her to continue to receive her full salary while she pursued them, so there would have been no economic duress to those choices. Again, given her independent counsel and the amount of time she was given to consider her choices, the court found that Washington failed to allege duress. 

Washington made many other allegations, including illegality, mistake, and lack of consideration, all of which the court dismissed. 

 

https://lawprofessors.typepad.com/contractsprof_blog/2018/01/adequate-counsel-and-time-to-consider-terms-defeats-claims-of-fraud-and-duress.html

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