The beams held the contract hostage

Meridian Construction Pty Ltd contracted with Ferro Supplies Pty Ltd for the supply of 40 tonnes of fabricated steel beams for $220,000, to be delivered to Meridian's building site by 14 August. Meridian's head contract with the site owner contained a liquidated damages clause of $15,000 per day for late completion, a fact Ferro's manager, Tony, knew well.

On 9 August, five days before delivery was due, Tony phoned Meridian's project manager, Priya, and said "Steel prices have jumped and I'm not sending the beams unless you agree to pay another $60,000. Sign the variation today or the truck doesn't leave the yard." Priya asked for time to think. Tony replied "You've got until 5pm. After that I'm quoting the beams to another buyer."

Priya rang a second supplier, Ironclad Steel, who could supply equivalent beams but needed three weeks to fabricate them, well past the 14 August deadline and into heavy liquidated damages territory. With no other option that would meet the deadline, Priya signed the variation agreement that afternoon, and Meridian paid Ferro the extra $60,000 on delivery.

Meridian has since discovered that steel prices had not in fact risen, and that Tony invented the story to extract a better margin from a contract he found unprofitable.

Advise Meridian whether it can rescind the variation agreement for duress.