Facts

On 12 October 1945, a contract was concluded between Berger and Burzi, represented by the law office A. Lutomirski, in which Burzi acknowledged a debt of 13'500 Swiss francs towards Berger. The contract provided for staggered payments and interest at 5% per year. Burzi paid part of the debt, but then refused to continue paying, alleging that the contract had been concluded under duress and fear of Berger, who had threatened him with bankruptcy. The Zurich district court and the Zurich court of appeal rejected the request for cancellation of the contract, but the Federal Court referred the case back to the court of appeal to examine whether the contract had been concluded under duress and whether Burzi had acted under the influence of fear.

The key facts are as follows

  • The contract was concluded on 12 October 1945.
  • Burzi acknowledged a debt of 13'500 Swiss francs towards Berger.
  • The contract provided for staggered payments and interest at 5% per year.
  • Burzi paid part of the debt, but then refused to continue paying.
  • Burzi alleges that the contract was concluded under duress and fear of Berger.

Considerations

The Federal Court considered that founded fear may be invoked as a reason for cancellation of a contract, even if the declaration provided for in Article 31 CO was not made within the year. The court also considered that the threat to enforce a right may be considered as an exploitation of the debtor's distress, which is prohibited by Article 30 paragraph 2 CO.

The court also examined the question of whether Burzi had acted under the influence of fear when concluding…