Critical Analysis of Kakavas v Crown Melbourne Ltd

Running head: CONTRACT LAW
CONTRACT LAW
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Name of the University:
Author Note:

CONTRACT LAW1
Critical Analysis of Kakavas v Crown Melbourne Ltd [2013] HCA 25 (5 June 2013) (High
Court of Australia):
Issue:
The issue involved in the present case study is whether Crown was involved in
unconscionable conduct.
Rules:
Unconscionable conduct or unconscionability is a doctrine present in contract law which
states that the terms in the contract are so unjust or one sided that one party is favoured towards
the party having better position or power of bargaining such that they are in contradiction with
the good conscience (Goldberger 2016). It also refers to the transactions that take place between
a dominant party with a party which is weaker. Hence it also involves duress as well as undue
influence. This type of unconscionable conduct is not permitted by equity and also by statute.
Equity comes into play when in contract, one party exercises dominance and advantage
over other party which has a special disadvantage or disability like old age, illness, lack of
education, illiteracy or any other similar type of factors. This type of unconscionable conduct
results into dealings those are in general oppressive and harsh towards the weaker party (Burdon
2018). If such conduct can be established, then the weaker party has the option of avoiding such
transaction. This was seen in the case of Commercial Bank of Australia v Amadio (1983) 151
CLR 447.

CONTRACT LAW2
The statute also provides safeguards against unconscionable conduct in contract. The
Australian Consumer Law in its Part 2-2 had introduced several restrictions on this
unconscionable conduct.
Section 20 of the ACL provides restrictions on unconscionablity involved in by any
corporation. However, this section does not apply where section 21 is applied. Section 20(1) of
the ACL states that no one shall involve in an unconscionable conduct as per the meaning given
in unwritten law in a transaction of trade or commerce. A person if violates this section is liable
to a pecuniary penalty.
Section 21 prevents an unconscionable conduct in relation to the acquisition or service of
goods or services by a person or company except a listed public company. Further section 22
states several factors which can be considered by conduct when deciding whether any conduct is
unconscionable.
Facts of the present case:
The present case involved Kakavas, a problem gambler who was the plaintiff in the case.
He was a known gambler who had a turnover of about 1.5 billion dollar. But he lost about 20.5
million dollar for which he claimed that the Crown Casino of Melbourne was involved in
unconscionable conduct (Fels and Lees 2018). Further, he claimed that by permitting and
encouraging him into gambling at the casino by an unconscientious manner. He further tried to
support his claim by alleging that he was lured into casino by giving him incentives and allowing
him to use the private jet belonging to the casino (Kakavas v Crown Melbourne Limited [2013]
HCA 25 at [3] and [27]). He also claimed in the earlier proceedings that the casino had a duty of
care to the patron who had a gambling problem (Kakavas v Crown Melbourne Ltd [2009] VSC