Business Law Assignment Unconscionability
Added on 2020-05-16
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Business Law AssignmentUnder the contract law, unconscionability is referred to such terms which are so unfair or unjust,that one side of the contracting party is overwhelmed by the other side of the contracting party,which holds superior bargaining power, and which is against the good conscience (Latimer,2012). Basically, unconscionability or unconscionable conduct covers the transactions which areundertaken in between a weak party and a dominating party. Due to this, there is an overlappingof this concept with the other vitiating factors in a contract, of duress and undue influence. Theconcept of unconscionability is applicable based on the scenario in which it takes place andaccordingly attracts the common law or the statutory law (Vout, 2009). In equity, theunconscionable conduct is related to the conduct where one party is taken off by some otherperson due to the special disability help by the first person. The examples of special disabilityinclude illiteracy, age, lack of education, or these factors being in combination. Due to thesereasons, the weaker party is treated in a harsh and oppressive manner (Australian Contract Law,2018a). The following parts cover a detail on unconscionability and its various aspects inAustralia, in terms of its applicability under common and statutory law and the leading cases onit. Unconscionable conduct is something which results in the transaction undertaken under thecontract being null and void. There are a number of cases where unconscionable conduct hasresulted in the transactions being set aside, or given a null affect (Clarke and Clarke, 2016). InAustralia, the leading matter in context of unconscionable conduct is that of Commercial Bank ofAustralia v Amadio(1983) 151 CLR 447. In this case, a mortgage had been signed by Amadiofor the purpose of securing loan for their son. The details of this mortgage or what actually wasgoing on was not informed to Amadio. Amadio were Italian and they did not know much ofEnglish which made them nearly illiterate. When the Bank attempted to seize their home whichPage 2
Business Law Assignmenthad been mortgaged, the validity of this mortgage was challenged by Amadio. This led to thecourt ruling in favor of Amadio based on the presence of unconscionable conduct in this matter.The reason for upholding the presence of unconscionable conduct was that there was an absenceof English knowledge with Amadio (Australian Contract Law, 2018b). Another example of presence of unconscionable conduct was seen in Louth v Diprose (1992) 175CLR 621; [1992] HCA 61. In this matter, D was infatuated towards L and he was in the habit ofshowering D with a number of gifts repeatedly. Once D proposed to L, she declined. After sometime, D was told by L that L had been very depressed and that in case she was not able to pay themoney on her home, she would be evicted from it and would have no place to live. And as soonas this would happen, L would be committing suicide. The majority of it was untrue. Respondingto this emotional pressure, D agreed that he would buy the home for L and that he would beputting the home in L’s name as she was insisting on doing so. Certain years passed and therelationship which was present between the two got deteriorated. D asked L to transfer the homein his name as he had paid the money for it but L declined to honor this request. As a result ofthis, D sued L and was successful (Australian Contract Law, 2018c). The judge of the case stated that D was beneficially entitled to the land bought by him. Hefurther stated that it would be unconscionable in this case where the home is given to L. Evenupon the appeal being made by L, these were not successful, both in the Court of Appeal and inHigh Court of Australia. The High Court had held in this case that L had created such anenvironment of crisis which in reality had never been present. D held such a post in this casewhere he had been completely dependent on L. This led to the home being purchased by Dwhich was just done due to D being emotionally dependent on L and the influence which sheheld over him, where he even disregarded his own interest. There was completePage 3
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