Last week's Superior Court decision in William L. Rutherford Limited v. Iwaskiw, 2008 CanLII 31814 (ON S.C.)
sets out the test for economic duress quite clearly:
[11] There are two aspects of the test a defendant must meet to establish the defence of economic duress:
(a) Was the defendant's will coerced? and
(b) Was the pressure exerted to coerce the defendant's will illegitimate?
See Stott v. Merritt Investment Corporation [1988] O.J. No. 134(C.A.); Gordon v. Roebuck [1992] O.J. No. 1499 (C.A.); and Sifam Management Sales Limited v. Raznick [2005] O.J. No. 3688 (S.C.J.).
[12] Insofar as the first aspect of the test is concerned, the Court of Appeal has identified and adopted four questions to consider:
(i) Did the defendant protest at the time?
(ii) Was there an effective alternative course open to the defendant?
(iii) Was the defendant independently advised?
(iv) After entering into the contract, did the defendant take steps to avoid it?
James Morton
1100 - 5255 Yonge Street
Toronto, Ontario
M2N 6P4
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