Business Law Assignment: Valid Contract
Added on - 28 May 2020
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Running head: BUSINESS LAWBusiness LawName of the StudentName of the UniversityAuthor Note
1BUSINESS LAWIssueThe issue which needs to be determined in relation to the given case study is that whetherthere has been a valid contract formed between Rofi and The Bolton Connect Pty Ltd in the lightof unconscionable conduct.RuleAs defined by Knapp, Crystal & Prince (2016) statement or action which is considered sounreasonable that it is in defiance of good conduct is known as unconscionable conduct. Thedefinition in relation to the concept is general as no exact meanings in relation to the concepthave been provided through law.In Australia the concept of unconscionable conduct is dealt with by the provisions ofAustralia Consumer Lawas provided by schedule 2 ofthe Australian Competition andConsumer Act 2010as well as the provisions of common law.Section 21 of the ACCAdeals with unconscionable conduct in relation to consumers inAustralia and provides that until the consumers have totally understood the terms of a writtencontract she should not sign it.It is stated through the section that while indulging in trade and commerce a person inrelation to supplies of goods or services or acquisition of goods or services engage in a conductthat is unconscionable in all circumstance.According tosubsection 3for the purpose of determining whether subsection (1) hasbeen violated the court has to give regard to only those circumstances which are reasonablyforeseeable when the allegation of contravention had been made.
2BUSINESS LAWAccording tosubsection 4(c)whether a contract entered upon by the parties includesunconscionable conduct or not is to be determined by the court by taking into consideration theterms of the contract and the way and degree to which the contract was performed. In additionthe court also considers the circumstances of the parties upon the formation of the contract.In common law equity intervenes in situation where an advantage of a special disabilityheld by the other person is taken by a party such as education, lack of understanding, age or acombination of these factors. The transaction has to be so harsh that it leads to oppressive resultsfor the other party. In case such a situation is established by the other party they may seek torescind the contract.There a few land mark cases which have been trialed by the court in relation toUnconscionable conduct. In the case ofBlomley v Ryan (1956) 99 CLR 362the defendant hadentered a contract of buy a farm from the plaintiff who was 78 years old. The plaintiff used to beregularly under the influence of alcohol. The court in this case ruled in favor of the plaintiff thatthe contract was not valid as the consideration was well below market price and the plaintiff didnot gave capacity to make a rational judgment at the time the contract was formed.In the caseCommercial Bank of Australia v Amadio (1983) 151 CLR 447;  HCA14the court also had to address an issue in relation to unconscionable conduct. In this case theplaintiffs were the parents of the defendant who were induced by him to act as the guarantor ofloan. The parents were Italians and did not have much command over English, in addition theywere uneducated and did not have business knowledge. It was held by the court in this case thatthe contract entered upon with the plaintiff can be rescinded by them based on the concept of