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BUS307 - Business Law Case -Mortgage Contract Issue

   

Added on  2020-03-02

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Business Law 1Business Law AssignmentStudent Name:Institution:
BUS307 - Business Law Case -Mortgage Contract Issue_1
Business Law 2Issue: the issue of that we are decided in this case was if the mortgage contract relating betweenGeorge and the finance company was affected by unconscionability.Rule: In order to decide the issue, the rules related with unconscionability have to be discussed.The principle of unconscionable conduct has been mainly designed with a view to uphold fairplay and equity (Meagher, Heydon and Leeming, 2002). According to this principle, a particularbehavior can be termed as unconscionable if it attracts censure and justifies the grant of relief bythe court to the parties that have suffered as a result of such conduct (Duggan, 2003). Thedoctrine of unconscionability was relied upon by the High Court in Blomley v Ryan. Similarly,the doctrine was further strengthened after the decision given in commercial Bank of AustraliaLtd. v Amadio (1983). In Amadio, an elderly couple who had migrated from Italy, Mr. and Mrs. Amadio stood as theguarantor's for the loan taken by their son from the bank. The manager of the bank was aware ofthe fact that the business of the son was not doing well and probably their son hadmisrepresented the facts to his parents in order to make his parents stand as guarantors for theloan. Later on the business of their son failed and the bank tried to enforce the mortgage againstthe elderly couple. The court held that the bank manager was aware of the special disability fromwhich the elderly couple was suffering. Still no steps were taken by the bank to ensure that theelderly couple was aware of the nature of the transaction. Hence it can be said that it wasunconscionable for the bank to take advantage of this opportunity. The result was the emergence of a new concept that was later on incorporated in the Australianlegislation also. After the decision given in Amadio case, a number of developments have takenplace which includes the Australian Consumer Law and also the ASIC Act, 2001.
BUS307 - Business Law Case -Mortgage Contract Issue_2

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