Validity of contract for transfer of beach and unfair contract under Australian Consumer Law

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Contents
Part A...............................................................................................................................................2
Issue.............................................................................................................................................2
Relevant Law...............................................................................................................................2
Application of Law......................................................................................................................3
Conclusion...................................................................................................................................3
Part B...............................................................................................................................................3
Issue.............................................................................................................................................3
Relevant Law...............................................................................................................................4
Application...................................................................................................................................5
Conclusion...................................................................................................................................5
Bibliography....................................................................................................................................6

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Part A
Issue
Whether the transfer of beach by the grandmother to Anne is a valid contract?
Relevant Law
Whenever any agreement is made by two persons by exchanging offers and acceptances, then, in
order to convert such an agreement into contract, the requirements include a consideration,
capacity and intention of the parties. These elements together constitute a contract that has the
legal enforceability. (Latimer, 2016)
A valid contract has the capacity to bind the parties to the contract and the parties are obligated
to comply with the terms that are made part of the contract. Once the parties to the contract
comply with their contractual obligations then the contract ceases to exist.
But, many a times, before the conclusion of the contract, one of the party is of the belief that the
consent that is given by him is not free but is attained by the other party to the contract by
making any kind of influence, duress or any unconscionable acts, then, the aggrieved party has
every right to rescind the contract and deny to comply with the contractual obligations. So, the
main elements the presence of which can render the contract not valid are unconscionable
conduct and undue influence and duress. (Vout, 2006)
Unconscionable conduct is an act wherein the bargaining powers of the contractual parties differ,
that is, one party is superior from the other party. When the superiors party indulges in actions
that are not in compliance with ethics, morals and principles which any normal prudent person
will comply with in the given situation and thus takes gains of his superior position at the cost of
the weaker party and thus brings advantages to himself, then, the transaction is considered to be
affected by unconscionable conduct on the part of the superior party and is analyzed in (Blomley
v Ryan, 1954). There is no single element that defines whether one party is taking
unconscionable actions over the weaker party, rather, there are several factors that are taken into
account such as; the age of the affected party, his mental condition, the literacy of the party or
the bargaining powers of the parties, etc and is analyzed in (Commercial Bank of Australia v
Amadio, 1983). (Caffrey, 1991)
Once a transaction is found to suffer from unconscionable conduct, then, the aggrieved party as
very right to terminate the contract and is held in (Kakavas v Crown Melbourne Ltd, 2013).
Another element that can render the contract unenforceable is undue influence. When the
dominant party by taking advantage of his position makes an influence on the weaker party and
thus the weaker party makes a contract with the dominant party without using his free will and
mind and thus the decision is not independent, then, the contract is considered to be suffered
from undue influence and is held in (Johnson v Buttress, 1936) and (Farmers Co-operative
Executors & Trustees Ltd v Perks, 1989). Undue influence occurs when the parties shares the
relationship of trust or parent-child relationship, etc, then as per (Royal Bank of Scotland Plc v
Etridge (No 2), 2001)Royal Bank of Scotland Plc v Etridge (No 2) (2001), the contract can be
rescinded if suffers from any kind of undue influence. (Enonchong, 2006)
Further, when there is presence of duress then also the contract can be terminate. Duress occurs
when the dominant party takes illegitimate actions, such as, threat on the arrived party body or

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property and compels him to establish a contractual relationship then the contract suffers from
duress and is held in (Universe Tankships of Monrovia v Int’l Transport Workers Federation,
1983).
The law is now applied.
Application of Law
As per the facts of the case,
Anna and Peter are the grandchildren of their grandmother. Anna is aware that Peter is the
favorite grandchild of their grandmother. She is also aware that Peter is going to inherit the
beach house of the grandmother.
Now, the grandmother has transferred the land of the beach in favor of Anna but the transaction
is suffered from:
i. Duress is incurred by Anna over her grandmother so that she transfers the land of the
beach in her favor. It was stated that over a period of six months many a times Anna
has incurred threats on her grandmother and persuaded her to transfer the land in the
name of Anna. Thus, it is under the threat of life and property that grandmother has
transferred the land to Anna.
ii. Also, the transaction is suffering from unconscionable actions. It is submitted that the
position of Anna is superior in comparison with her grandmother. Anna holds a
stronger position because she is aware that her grandmother is weak, elderly and can
eventually be pressured into signing the transfer even when the grandmother is not
aware as what she is signing. Thus, Anna took advantages of her position and thus
bought gain to herself at the cost of her grandmother. Thus, the acts are suffering
from unconscionable actions.
iii. Further, there is undue influence that is incurred by Anna. Anna is sharing the
relationship of parent-child with her grandmother and thus many a times Anna
persuaded her grandmother in a soft manner to convince her grandmother to sign a
transfer of land transferring the beach house to Anna. Thus, there is a relationship of
trust that is shared amid the two but the relationship is betrayed by Anna to bring an
advantage to herself.
Conclusion
Thus, the acts of Anna wherein she persuaded, influenced and threatened her grandmother so that
she transfers the land of the beach in her favor is an act of undue influence, unconscionable
conduct and duress. Thus, the grandmother has every right to cancel the contract of the transfer
of land of the beach on favor of Anna.
Part B
Issue
Whether the contract amid John and Brown Suppliers Pty Ltd is an unfair contract under the
Australian Consumer Law? If yes, then what are the rights that can be availed by John against
Australian Consumer Law?