A restaurant owner granted an unsecured note to a supplier. The supplier demanded a deed of trust as security, and the owner signed under duress. The owner later sold the restaurant to the chef, who assumed the note. Which statement about the chef’s ability to assert the owner’s duress defense is correct?

A restaurant owner granted an unsecured note to a supplier. The supplier demanded a deed of trust as security, and the owner signed under duress. The owner later sold the restaurant to the chef, who assumed the note. Which statement about the chef’s ability to assert the owner’s duress defense is correct?

• A. The chef may assert the owner’s duress defense against enforcement of the note.
• B. The chef cannot assert the owner’s duress defense against enforcement of the note.
• C. The chef may rescind the transaction due to the duress.
• D. The chef’s assumption of the deed of trust nullifies the deed.

Answer: (B)

Duress is a personal defense to contract validity and enforceability. A party coerced into signing a contract cannot transfer that personal defense to someone who later assumes the obligation. Here, the owner signed the note and the deed of trust under duress. When the chef later assumes the note, the chef becomes the obligated party to repay the debt, but the owner’s duress defense does not ride along with the instrument. The defense belongs to the original signer and cannot be used by the new obligor to avoid enforcement of the note. Rescission or nullifying the deed would also not flow from the chef simply assuming the debt; the right to rescind due to duress was specific to the party coerced. And assuming the deed of trust does not erase the lien or nullify the underlying obligation—it just changes who is liable.

Duress is a personal defense to contract validity and enforceability. A party coerced into signing a contract cannot transfer that personal defense to someone who later assumes the obligation. Here, the owner signed the note and the deed of trust under duress. When the chef later assumes the note, the chef becomes the obligated party to repay the debt, but the owner’s duress defense does not ride along with the instrument. The defense belongs to the original signer and cannot be used by the new obligor to avoid enforcement of the note.

Rescission or nullifying the deed would also not flow from the chef simply assuming the debt; the right to rescind due to duress was specific to the party coerced. And assuming the deed of trust does not erase the lien or nullify the underlying obligation—it just changes who is liable.