## Facts

- Headley contracted in writing with Hackley and McGordon to cut and deliver 8,000,000 feet of logs to the main Muskegon River.
- The contract required the logs to be measured by a scaler selected by Hackley and McGordon, using “standard rules or scales in general use” on the Muskegon river and lake.
- The contract also provided that the “expense of scaling” would be shared equally by the parties.
- A dispute arose over whether the scaler’s board (lodging/meals) was part of the shared scaling expense; defendants offered evidence of a local custom that jobbers boarded scalers at their own expense.
- A second dispute arose over which scaling rule applied because the scale generally used on the river/lake changed between contracting and the time performance required scaling.
- After performance, Headley claimed roughly $6,200 was owed; defendants claimed substantially less and offered $4,000 and a “receipt in full.”
- Headley, under severe financial pressure, accepted the $4,000 and signed the receipt, later asserting it was obtained by duress.

## Issues

1. Whether evidence of trade usage was admissible to negate sharing the scaler’s board cost where the contract expressly required the parties to share the “expense of scaling.”
2. Whether “standard rules or scales in general use” referred to the scale in use when the contract was made or the scale in use when scaling occurred.
3. Whether a “receipt in full” given in exchange for partial payment was voidable for duress where the debtor refused to pay more despite knowing the creditor’s financial distress.

## Decision

- The Michigan Supreme Court reversed and remanded.
- The cost of the scaler’s board, if part of the scaler’s compensation arrangement, was an “expense of scaling” to be shared under the contract; contrary custom evidence was inadmissible.
- The contract’s reference to the scale “in general use” meant the scale in general use at the time scaling was to be performed, not at contract formation.
- The facts did not establish duress as a matter of law; defendants’ refusal to pay more than they conceded was not an unlawful act, so the receipt could not be avoided on a duress theory.

## Legal Principles

- A written contract term controls over contrary trade usage; custom evidence is inadmissible to vary or contradict an express contractual allocation of responsibility.
- When a contract incorporates an external standard “in general use” for future performance, the referenced standard is ordinarily the one prevailing at the time performance requires its application.
- Duress requires an unlawful act that deprives a party of free will; there is no duress where the threatened act is within the other party’s legal rights.
- Mere financial necessity, even if known to the other party, does not make a compromise or “receipt in full” voidable absent unlawful conduct such as wrongful detention of goods or other illegal exaction.
- A receipt purporting to discharge an undisputed, known debt may be ineffective for lack of consideration if procured by improper means, but a good-faith dispute may be compromised without duress.

## Conclusion

The court held that express contract terms governed scaling expenses and the applicable scaling rule, and it rejected economic pressure alone as duress, reversing a jury verdict that had treated a “receipt in full” for partial payment as void.


Hackley v. Headley, 45 Mich. 569, 8 N.W. 511 (Mich. 1881)