Should the guarantee agreement be set aside due to duress

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Reference no: EM131377652

Glen Haumont, who owned an equipment retail business in Broken Bow, Nebraska, owed the Security State Bank more than $628,000 due to improper selling practices as well as business and inventory loans.

Several times Glen tried to persuade his parents, Lee and Letha Haumont, to financially back his business debts, but each time they refused. Glen then told his parents that, according to his attorney and the bank, Glen could be prosecuted and sent to jail.

Soon afterwards, David Schweitz, the president of the bank, drove out to the elder Haumonts' farm to convince them to sign as guarantors of Glen's debt. Both Schweitz and Glen stressed to the Haumonts that unless they agreed to guarantee his debt, Glen would go to jail. Letha asked that her attorney be allowed to read over the guarantee agreement, but Schweitz told her that he did not have time to wait and that she must decide right then whether Glen was to go to jail.

As a result, the Haumonts signed the agreement, encumbering their previously debtfree family farm for more than $628,000. Should the guarantee agreement be set aside due to duress?

Reference no: EM131377652

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