Extortion
The crime of obtaining property or promises through threats, coercion, or fear; contracts made under extortionate pressure are void or voidable and the conduct may be criminally prosecuted.
While straightforward in theory, many businesses fail to actively track obligations tied to this concept - often resulting in missed deadlines, unintended renewals, penalties, or loss of contractual rights.
US Law · For business owners and foundersWhat is a Extortion?
Extortion is the crime of obtaining property, money, or promises through threats, coercion, force, or fear. It is both a criminal offense and grounds for voiding a contract. Extortion is similar to coercion but is specifically criminal in nature.
Extortion typically involves threats of violence, harm, property damage, or economic ruin. For example: "Sign this contract or I will harm you," "Pay me money or I will burn down your business," or "Give me a discount or I will destroy your reputation." These threats, coupled with obtaining something of value, constitute extortion.
Contracts made under extortionate threats are void or voidable. The victim can rescind the contract and recover what they gave up. Additionally, the person making the extortionate threat can be criminally prosecuted for extortion, which is a felony in many jurisdictions.
In practice, many teams rely on a contract expiry tracking system to stay on top of dates and obligations tied to clauses like this.
Key Elements
Threat or Coercion
There must be a threat of harm, violence, property damage, or other damaging consequences. The threat must be improper - not a lawful threat to exercise legitimate legal rights.Obtaining Property or Promises
The perpetrator must obtain or attempt to obtain property, money, or a legally binding promise through the threat.Intent
The perpetrator must act with the intent to obtain property or a promise through the threat. Accidental harm does not constitute extortion.Fear or Compliance
The victim must comply or fear harm. If the victim does not believe the threat, extortion may not have occurred.Criminal Penalty
Extortion is a crime. The perpetrator can face criminal charges, imprisonment, fines, and restitution. This is different from civil contract disputes.Real-World Example
A contractor, BuildCo, threatens a property owner, LandOwner: "If you do not hire my company to construct your new building and pay me $500,000 upfront, I will file false liens against your property and destroy your credit rating. I will make sure you cannot refinance or sell." Frightened, LandOwner agrees to hire BuildCo and pays $500,000.
This is clear extortion. BuildCo made improper threats (filing false liens, threatening credit destruction) to obtain a contract and payment. The threats are not lawful - filing false liens is itself a crime. LandOwner can: (1) rescind the contract with BuildCo, (2) demand return of the $500,000, (3) sue BuildCo for damages, and (4) report BuildCo to law enforcement for criminal extortion. BuildCo faces both civil liability and potential criminal prosecution for extortion.
This is why many businesses adopt automated deadline tracking to ensure no critical dates are missed before they pass.
Sample Clause Language
Anti-Extortion AcknowledgmentWatch Out For
Extortion Is a Crime, Not Just a Contract Issue
Unlike ordinary contract disputes, extortion can result in criminal prosecution. Do not make threats to obtain contract terms or payments. Even seemingly small threats ("I will sue you") may be deemed extortion in some contexts.Threats of Litigation May Be Extortion
Normally, threatening to sue is lawful. However, if you threaten to sue for something you know is baseless, with the intent to coerce an unrelated payment or promise, that may be extortion.Reporting Extortion to Law Enforcement
If someone extorts you, report it to local law enforcement (police, FBI) as well as pursuing civil remedies. Extortion is a serious crime and law enforcement can investigate and prosecute.Business Negotiations vs. Extortion
Be careful to distinguish between tough negotiation and extortion. Saying "I will not do business with you unless you meet my terms" is negotiation. Saying "Unless you agree to my terms, I will destroy your business" may be extortion.Don't let extortion deadlines catch you off guard
Key dates tied to extortions - renewal windows, expiry cutoffs, notice periods - can easily slip through the cracks when tracked manually. Missing them triggers automatic extensions, penalties, or lost rights. ExpiryEdge tracks every critical deadline and sends automated reminders before they're due - so nothing slips.
Instead of relying on spreadsheets or manual follow-ups, a centralized renewal reminder system ensures every deadline is visible, tracked, and actioned automatically.
How to Use This in Your Favor
Avoid Making Threats in Business Dealings
Never threaten harm, violence, or property damage to obtain contract terms. Even threats of frivolous litigation can be deemed extortion. Stick to legitimate business leverage.If You Are Extorted, Preserve Evidence and Report
If someone makes extortionate threats, preserve all evidence (emails, recorded calls, witness statements) and report the conduct to law enforcement. Do not delay.Have a Clear Policy Against Extortion
Include in your code of conduct and contracts that extortion, threats, and coercion are prohibited and will be reported to law enforcement. Make clear that such conduct will not be tolerated.Distinguish Demands from Threats
In negotiations, you can make demands ("I will not sell unless you pay $X"). You cannot make threats ("Unless you pay, I will harm you"). Understand the distinction.Related Terms
Frequently Asked Questions
Is extortion the same as coercion?
No. Extortion is a specific crime involving threats to obtain property or promises. Coercion is broader and includes any improper pressure. All extortion is coercion, but not all coercion is extortion.
Can you be charged with extortion for threatening to sue?
Generally no, because you have the lawful right to sue. However, if you threaten to sue for something you know is baseless, with intent to coerce an unrelated payment, that may be extortion.
What is the criminal penalty for extortion?
Extortion is a felony in most jurisdictions. Penalties vary but typically include imprisonment (up to several years), fines, and restitution to the victim.
Can you sue in civil court if you are extorted?
Yes. In addition to criminal prosecution, the victim can sue civilly to recover damages and rescind any contract made under extortion.