Hackley v. Headley
Supreme Court of Michigan, 1881.
45 Mich. 569, 8 N.W. 511.

Facts:

Hackley and Headley agreed to a contract where Headley was to cut, haul, and deliver 8,000,000 feet of logs. The logs were to be measured in accordance with the standard rules or scales in general use at the time.

  • The “Scribner rule” was the scale generally used at the time the contract was entered into.
    • Under this rule, Headley would make $6,200.
  • The “Doyle scale” was what was used by the time the timber was cut and delivered.
    • Under this rule, Headley would make $4,200.

When it came time for Headley to be paid, Hackley said he was only going to pay $4,000.

  • Headley said that wasn’t right and that he couldn’t take it.
  • Hackley then told Headley to sue him if he wanted to.
  • Headley said he didn’t have the money for that.
  • Eventually, Headley accepted it, because he would be financially ruined if he didn’t.

History:

Lower court ruled in favor of Headley.

Issue:

Was this a case of duress?

Holding:

No. Case reversed.

Reasoning:

  • Hackley didn’t create the condition that made the money so important to Headley.
  • It would be a dangerous doctrine if people could use duress because of their financial trouble.
  • No one could know when he would be safe in dealing on the ordinary terms of negotiation with a party who professed to be in great need.
  • Here, the only reason that duress existed was because one party was too poor to sue the other. This does not qualify as duress in a legal sense.

Prof:

For purpose of “duress,” a reasonable alternative is considered always available when there is merely a threat to not pay money to the victim.

Duress: A contract is voidable (by the victim) under the doctrine of “duress” (even if there is consideration) when the victim’s manifestation of assent

(1) was induced

(2) by an improper threat

(3) that left the victim with no reasonable alternative.

Side Note: This court focused on duress, whereas on remand, they focused on consideration, and Headley won.