Facts
- A federal contractor, Mech-Con Corp., performed work on HVAC systems at Walter Reed Army Medical Center.
- Mech-Con (principal) and Albert Bond and Lorna D. Bond (sureties) executed a payment bond covering labor and materials for the project.
- Mech-Con later defaulted; Mech-Con and Albert Bond filed for bankruptcy.
- The United States (for the use of Trane, a supplier) sued Lorna Bond in federal district court to recover on the payment bond.
- Lorna Bond asserted duress, alleging her husband physically abused and threatened her to coerce her signature and refused to explain the documents’ contents.
- She did not allege that her hand was physically forced to sign, and she did not claim the obligee or claimant knew of the coercion.
- The federal court certified to Maryland’s highest court a question on whether duress is a defense against an innocent party to the contract.
Issues
- Under Maryland law, may a party whose assent was coerced assert duress as a defense against a party that neither knew of nor participated in the coercion?
- When does duress render a contract void, rather than merely voidable?
Decision
- The court answered that duress may be asserted against a party who neither knew of nor participated in the coercion.
- The court held that duress renders a contract void when it involves physical compulsion or threats of imminent serious physical harm such that a reasonable person would fear serious bodily injury.
- The court left to the federal district court the factual determination whether Lorna Bond’s allegations met the void-contract threshold or instead made the bond only voidable.
Legal Principles
- A duress defense is not barred merely because the party seeking enforcement did not cause or know of the coercion.
- Physical compulsion and threats of imminent serious physical harm can negate assent and make the agreement a nullity (void).
- Lesser threats or pressures generally make an agreement voidable at the election of the coerced party, not void from inception.
- The degree, immediacy, and severity of the threatened harm control whether coercion eliminates assent or permits later avoidance.
Conclusion
Maryland law permits a coerced signatory to assert duress even against an innocent obligee, and it distinguishes between void and voidable agreements based on whether coercion involved physical compulsion or imminent threats of serious bodily harm sufficient to overcome a reasonable person’s ability to resist.