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Contracts Keyed to Fuller
Chouinard v. Chouinard
Citation:
568 F.2d 430 (1978)Facts
In 1970, Fred Chouinard, along with his father Al and twin brother Ed, started ARC Security with equal $2,000 contributions, though the exact ownership structure remained disputed. By 1974, the company had grown substantially but faced severe financial difficulties due to Fred’s business decisions. The company urgently needed financing to meet its $50,000 payroll and secure ongoing credit. Fred arranged financing with Heller Company, but Heller would not complete the loan until the family’s ownership dispute was resolved. Al and Ed, who claimed substantial ownership interests based on the initial capital contributions, used this opportunity to settle the dispute. Fred and his wife executed two promissory notes totaling $190,000 to Al and Ed in exchange for their release of ownership claims. Fred made regular payments on the notes for over a year before filing suit claiming the notes were executed under duress.
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