Download Unconscionability in Contract Law and more Study notes Law in PDF only on Docsity! Unconscionability: under general law and statute It has expanded substantially Grossly unfair conduct’ Does not depend on pre-existing relationship UC broadly speaking is about abuse of power General law: - Blomley v Ryan (1956) 99 CLR 362 Judgements basic requirements of UC in GL as far as contracts are concerned Ryan was elderly sheep farmer, fond of drinking selling property, and B took advantage of R’s inherent disabilities (Age, dependence on other people, addiction to alcohol) to purchase property for low price may have been vitiated by unconscionable conduct equity may undo that transaction won’t say it’s, will do it because of special circumstances - Commercial Bank of Australia v Amadio (1983) 151 CLR 447’ elderly couple, poor English, they weren’t experienced son had business, and indebted to CB required more security CB put pressure to provide more security, and turned to parents’ home as security didn’t tell them full story (open ended loan for open ended amount) parents were willing to help, and told CB they’ll sign it up representative of CB came to house, spoke to family in kitchen of home Mr and Mrs Amadio and son with representative of bank and they signed it up circumstances were such, CB came knocking on door where they discovered full effect. This is a contract between couple and bank (son not a party) trying to have contract set aside won applied B and R approach 3 elements for contract to be set aside for UC: 1. One of parties to contract is suffering from special disadvantage or disability 2. Other party must have actual or constructive knowledge 3. That party then exploits special disadvantage or disability - Feature is consideration is generally inadequate not a separate element that needs to be proved. - Unable to act in his or her best interests - NB: UC is not designed to protect people from their own mistakes mistake was not seeking independent advice (UC is not designed to protect this per se) court said they made this mistake due to their special disadvantage. - UC will rarely arise when parties are in relatively equal bargaining position. - One expansion into statute has been Businesses claiming UC against other Businesses other small business depending on large business, franchisee/franchiser, small business and one supplier - CL takes a more sceptical view on UC for equal bargaining positions No fixed criteria for special disadvantage or disability of weaker party (anything inherent?) cases have established certain, fairly well special disadvantages (poverty, physical and mental illness, illiteracy or semi literacy, substance abuse, personality features [dependence] and lack of independent advice) can be one or more. Blomley emphasises substance abuse and old age Amadio old age, lack of English and lack of independent advice 3 elements: 1) Special disadvantage of disability 2) Actual or constructive knowledge of disability 3) Exploitation or advantage Louth v Diprose (1992) 175 CLR 621 Solicitor Louis Donald Diprose (the plaintiff/respondent) was infatuated with Carol Mary Louth (the defendant/appellant), whom he had met in Launceston, Tasmania in 1981. He showered her with gifts and, at one time, proposed to her; she, however, refused. Subsequently, the defendant informed plaintiff that she was depressed and was going to be evicted and, if this happened, she would commit suicide (this was largely untrue). In response, the plaintiff agreed to buy her a house and, at her insistence, put it in her name. Years later, when their relationship deteriorated, the plaintiff asked the defendant to transfer the house into his name. She refused and he brought proceedings seeking to recover the house. - middle aged man, was a solicitor, but became infatuated with younger woman tried to attract her attention followed her around and moved around the country she certainly knew of his intentions she said to him that she would kill herself because of financial difficulty he transferred property to her – relationship became over, tried to get property back. Said UC and was suffering from special disadvantage she took advantage of this and knew this HCA agreed partly because of her conduct manufactured crisis and he fell for it his SD in his infatuation emotional dependence made him vulnerable, that he could not make rational decisions in his interest based on facts. - What do the courts consider to be constructive knowledge need to establish that stronger party had constructive knowledge of SD woman should have known, and did know that Louth was dependent on her and would have done anything for her when she said she would commit suicide.
