News – General corporate and securities matters
27 April 2016
The legal magazine Tijdschrift voor Belgisch Handelsrecht published the piece of Natalie Lemense and Ana Maria Franken on pressure or coercion used by a party when entering into a contract (N. Lemense en A.M. Franken, “Dwang bij de totstandkoming van de overeenkomst: nietig?”, noot onder Rb. Eerste Aanleg Brussel, 18 September 2014, T.B.H. 2016/4, p. 407-425).
Using leverage to have a party sign a contract, or accept the terms put forward is legitimate. Misusing your normal position is not. Exerting pressure can become illicit if a party abuses its regular authority or legal position, and as such causes an imminent fear of a serious harm that pushes the other party to close the deal. That line can be thin. But crossing the line renders the contract vulnerable. The victim of illegitimate pressure can have that contract declared null, and fully cancelled.
Courts assessing such claims will evaluate the legal conditions and appreciate all aspect of the case, including the particular circumstances and the identity, knowledge and experience of the parties.
The court ruling we commented is unique and differs from previous case law that was fully analyzed, as it states that even an experienced, specialized and well-advised company can be the victim of illegitimate pressure and obtain the cancellation of the obligations it assumed in the contract.
For any further information or questions, please contact Natalie Lemense.