You are a small company that have a major contract with Adidas for selling them football shoes. The agreement has a term of two years. The price Adidas has to pay you is 20 euros per pair of shoes.

You are a small company that have a major contract with Adidas for selling them football shoes. The agreement has a term of two years. The price Adidas has to pay you is 20 euros per pair of shoes. Adidas owes you a big amount of money in unpaid invoices and you have requested them to pay these invoices several times. One day, you receive a call from Adidad FinancialDirector saying: We know you owe you 1 milliondollars, but, unless you agree to reduce that amount to Eur 800,000 we will terminate the contract. You finally accept the blackmail of Adidas director. Once the agreement has expired, after two years, Adidas said to you that unless the price of the shoes is reduced to 18 euros, they will not enter into a new agreement with your company.

Questions:

Can you avoid that settlement agreement by virtue of which you accepted not to receive 1 million? What would be your arguments in court?

Once the agreement expired,can Adidas “threaten” you with not entering into a new agreement if you don’t reduce the price of the shoes?