Machinery Hauling, Inc. v. Steel of West Virginia

Supreme Court of Appeals of West Virginia · 1989 · Contracts

384 S.E.2d 139 (1989)

Updated July 26, 2026

Contractseconomic duressbusiness compulsionimproper threatno reasonable alternativethreat to stop doing businessfuture business expectancyvoidable transaction

Facts

Machinery Hauling, Inc. contracted in January 1988 with Steel of West Virginia to transport seventeen loads of steel to Shelby Steel in Louisville, Kentucky. Near the end of delivery, Steel said the product was not merchantable and had been rejected, and it orally directed Machinery Hauling to return the last three loads to Huntington. Soon after, Steel's agent Robert Bunting told Machinery Hauling to pay Steel $31,000, representing the price of the undelivered loads, or else Steel would cease doing business with Machinery Hauling. Machinery Hauling alleged that this threat caused loss of business exceeding $1,000,000 per year and sued for damages based on the defendants' extortionate demands.

Issue

Whether a party's threat to cease doing business with another, made to induce payment or concessions, is actionable as extortion or economic duress when there is no continuing contract and the threatened party does not accede to the demand. More broadly, the court considered under what circumstances threats against business interests amount to actionable economic duress.

Rule

Economic or business duress exists where a plaintiff is forced into a transaction by unlawful threats or wrongful, oppressive, or unconscionable conduct by the defendant that leaves the plaintiff no reasonable alternative but to acquiesce; in that event, the plaintiff may void the transaction and recover any economic loss. However, a threat to do what the threatening party has a legal right to do, such as cease future business dealings absent a continuing contractual duty, is not duress, and a mere loss of future business expectancy is not a legal right supporting such a claim.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

Granite Span Logistics in Columbus regularly hauls materials for Riverview Metals, but the parties work load-by-load with no long-term agreement. After a dispute over damaged coils, Riverview tells Granite Span, 'Pay us $18,000 for the loss or we will never use your trucks again,' and Granite Span refuses, then sues for the profits it expected from future hauling jobs.

Under the governing doctrine, Granite Span's strongest claim for economic duress is:

Explanation. Economic or business duress requires an unlawful or wrongful threat that leaves the victim no reasonable alternative and forces acquiescence in a transaction. A threat to do what the actor has a legal right to do is not duress. Where there is no continuing contract, a party may choose to stop future business dealings, and loss of future business expectancy alone is not a legal right sufficient to support the claim. Also, the threatened party must have been forced into a transaction; refusal to pay defeats the claim here.