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apply State law on this issue.6
One reason to apply State law is that, in the area of
duress, as in other areas, a distinct Federal common law has not
developed.7 However, if we were to develop it, we would
presumably follow the Restatement, Contracts 2d (1981). Street
v. J.C. Bradford & Co., 886 F.2d 1472, 1481 (6th Cir. 1989)
(using Restatement, Contracts 2d to determine minimum
requirements under Federal common law of contracts with respect
to duress and abuse-of-fiduciary-relationship issues). Under the
Restatement, an improper threat by a party to a contract makes
that contract voidable by the other party for reasons of duress
when that threat leaves the victim no reasonable alternative to
6Although Federal contracts are a paradigm area for the
application of Federal common law, Boyle v. United Technologies
Corp., 487 U.S. 500, 504 (1988), the Supreme Court expressly
refused to commit itself on whether State or Federal law governed
on the issue of duress in connection with a Federal military
contract in United States v. Bethlehem Steel Corp., 315 U.S. 289,
299-300 (1942). The Supreme Court's latest extended
pronouncement on the issue of Federal common law, O'Melveny &
Myers v. FDIC, ___ U.S. ___, 114 S. Ct. 2048 (1994), a unanimous
decision, would seem to indicate that State law should be applied
to decide the duress issue before us.
7"A federal common law of landlord and tenant does not
exist." Powers v. U.S. Postal Service, 671 F.2d 1041, 1045 (7th
Cir. 1982) (Posner, J., deciding to use State law to decide
landlord-tenant dispute to which Postal Service was a party).
"For a variety of reasons having mainly to do with the paucity of
federal common law rules and the desirability of keeping the law
as simple as possible, federal courts asked to make federal
common law do so usually by adopting state law." Harrell v.
United States, 13 F.3d 232, 235 (7th Cir. 1993) (Posner, J.,
using State law to decide quiet title actions against Internal
Revenue Service); see also Street v. J.C. Bradford & Co., 886
F.2d 1472, 1481 (6th Cir. 1989) (Federal common law of release
"largely undeveloped" in cases).
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