Question

Which of the following was the result on appeal in Telekenex IXC, Inc. v. Charlotte Russe, Inc., the case in the textbook in which the defendant claimed that an amendment to a contract for communication services was unenforceable because it was entered into based on a threat that the services would be discontinued otherwise?A)The court found that the defendant had established a prima facie defense of duress and remanded the case for further proceedings.
B)The court found that the defendant had established a prima facie defense of misrepresentation and remanded the case for further proceedings.
C)The court found that the defendant had established a prima facie defense of undue influence and remanded the case for further proceedings.
D)The court found that the defendant was bound to the amendment because no one forced the agreement.
E)The court found that the defendant was bound to the amendment because the defendant had begun performance under it.

Answer 1

Answer:

A)The court found that the defendant had established a prima facie defense of duress and remanded the case for further proceedings.

Explanation:

The court ruled in favor of Charlotte Russe because the amendment of the contract was done under duress. Duress occurs when a party (generally with superior bargaining power) threats to file a lawsuit, physically hurt, or in this case cut a service provided if the other party does not agree to the terms of the proposed contract.

E.g. I force my neighbor to sell me his Playstation because if he didn't I would beat him up.

The actual words of the court were:

"[a] party may rescind a contract on the ground of duress if the party proves by clear, cogent, and convincing evidence that [it] agreed to the contract because of an improper threat by the other party that left no reasonable alternative."