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manifesting assent to the contract. 1 Restatement, Contracts 2d,
sec. 175(1) (1981). However, an improper threat by a third party
not a party to the transaction will render the contract voidable
only if the uninvolved party to the contract has not in good
faith and without reason to know of the duress either given value
or relied materially on the transaction. Id. sec. 175(2). For
our purposes, a threat inducing assent to a contract is improper
either (1) if what is threatened is the use of civil process and
the threat is made in bad faith or (2) if the resulting exchange
is not on fair terms and what is threatened is otherwise a use of
power for illegitimate ends. Id. sec. 176.
If State law governs, either independently or because
Federal common law so dictates,8 we must decide which State law,
and that is a choice-of-law question. In this case, we have
jurisdiction under the Internal Revenue Code. Therefore Federal
common law applies to the choice-of-law rule determination, and
this means applying the approach of the Restatement, Conflict of
Laws 2d (1971). Morewitz v. West of England Ship Owners Mut.
Protection & Indem. Association (Luxembourg), 62 F.3d 1356, 1362
n.13 (11th Cir. 1995); Congress Talcott Corp. v. Gruber, 993 F.2d
8Even if Federal common law does govern our issue, it would
appear that the Federal common law would merely apply the
relevant State law. O'Melveny & Myers v. FDIC, ___ U.S. at ___,
114 S. Ct. at 2053; cf. United States v. Kimbell Foods, 440 U.S.
715, 727-729 (1979); United States v. Brosnan, 363 U.S. 237, 241-
242 (1960) (adopting State law as rule of decision in Federal tax
case despite desirability of uniformity); North Am. Rayon Corp.
v. Commissioner, 12 F.3d 583, 589-590 (6th Cir. 1993), affg. T.C.
Memo. 1992-610 (applying New York law of undue influence).
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