Unconscionable Conduct Essay Example

in favor of the party receiving relief. In the early 1970s, attempts were made to revive this jurisdiction by introducing the defense of unequal bargaining power, as seen in Lloyds Bank v Bundy. However, the case ultimately relied on undue influence rather than inequality in bargaining power. In England, the House of Lords often ruled in favor of the party accused of inequity, as exemplified in National Westminster Bank pic v Morgan involving a husband-wife relationship. During this period, the Trade Practices Act 1974 was also enacted, addressing unconscionable conduct through sections 51aa and 51ab.

Section 51ab prohibits corporations from engaging in unconscionable conduct in trade or commerce, particularly in relation to the supply of goods or services. In Victoria, this is covered under section 89 of the Good Act 1958. Other states and territories also have similar legislation which stipulates that individuals must still pay for necessary goods, based on their social standing, even if they are mentally disabled or intoxicated. However, a victim of unconscionable conduct may be denied relief due to equitable reasons such as laches. A case example is Barburin v Barburin (1991) 2 Qd R 240, where the plaintiff attempted to void a share transfer after a 14-year delay in commencing legal action. The court denied relief, considering the unreasonable delay and the unjust consequences that had occurred during that time.

The history of unconscionability serves as the foundation for seeking relief based on unconscionability, as seen in the Commercial Bank of Australia Ltd v Amadio4 lawsuit. In this case, the Amadios' son had accumulated significant debt and owed a substantial sum to the bank. Unaware of their son's dire situation due

to their limited English proficiency, the Amadios agreed to be responsible for a $50,000 debt over a six-month period. Nonetheless, when the son's business failed, the bank insisted on collecting the owed money.

The Amadio alleged unconscionable conduct and requested the contract to be voided. The court granted this request, as it found that the bank was aware of their illiteracy but proceeded with the contract regardless. However, in recent times, there has been a shift towards not accepting unconscionability as a sole reason for voiding a contract. Judges have repeatedly cautioned against relying on this argument. Lord Radcliffe stated in Bridge v Campbell Discount Co Ltd that unconscionable should not be seen as a remedy for adjusting any contract between competent individuals that may have certain flaws. The courts are highly skeptical of applying the label "unconscionable" or its consequences to contracts made between parties outside the conventional categories of fraud, surprise, accident, etc. When faced with a case involving unconscionability, judges are concerned with determining whether and under what circumstances the court can void the contract based on this concept.

Following From Guidebook To Contract Law In Aust,

• Several focal points can be distinguished to appreciate the relevance of contract law.

1. Individuals may seek to depart from a promise, representation, or assurance in an unconscionable manner that lacks contractual significance.
2. Unconscionability can influence the decision to enter into a contract. This means that one party engages in unfair conduct to persuade the other party to agree to the contract.
3. Contract terms may be deemed unconscionable if they are unjust towards one of the parties involved.
4. In certain circumstances, enforcing a contract may be
   

considered unconscionable.

Conclusion

The concept of unconscionability serves as grounds for relief when there is evidence of unequal bargaining power in specific cases. However, defining it precisely is challenging. It is incorrect to believe that equitable fraud has specific definitions or excludes certain types of cases – this assumption is erroneous. In any given case, it cannot be assumed that elements such as inadequate consideration or disadvantages resulting from a transaction are always necessary for a court to grant relief. Similarly, the presence of independent advice does not always determine a refusal of relief in a particular case.The burden of justification lies with the plaintiff when proving certain elements in the defendant's transaction. However, the outcomes of such cases are not always predictable as they are dependent on the specific circumstances and fall within the jurisdiction of courts that grant relief in cases involving equitable fraud and unconscionable conduct. It is important to mention that courts do not solely provide remedies based on a contract being harsh, unconscionable, or oppressive according to general common law. There must be some form of remediable impropriety or misconduct by the other party involved in the transaction (J.S. Stake QC, referenced in Cheshire).

An amendment called S51AC in the Trade Practices Act has recently been introduced to benefit retailers in shopping centers. This amendment increases the value threshold for contracts covered under provisions addressing unconscionable conduct from $1 million to $3 million. Contracts exceeding this amount will still be subject to regulations outlined by common law.

According to Max Cameron, a Melbourne property lawyer, these changes were implemented

earlier this year following a ruling by the Federal Court. This ruling established that how a landlord treats their tenant can be considered as unconscionable conduct. The aim of these changes is to enhance protection for retail tenants during interactions with landlords.

Mr Cameron stated that with the higher ceiling, specialty retailers, many of whom are tenants in major shopping complexes, would now have the benefit of protection. He also highlighted the significance of the recent Federal Court decision in regard to unconscionable conduct in the property industry. This decision was the first to address unconscionable conduct under the act and found that a landlord's treatment of a food plaza tenant in Adelaide was indeed unconscionable. The landlord had allowed a competing tenant to infringe upon the exclusive menu entitlements granted to the first tenant and had also specified the price at which the tenant could sell its dishes, inhibiting their ability to compete with other tenants. Mr Cameron emphasized that this decision was a significant milestone considering that unconscionable conduct was not clearly defined in the act. Tim Piper, the executive director of the Australian Retailers Association, welcomed both the amendment and the court decision. However, he noted that retailers would face practical difficulties in utilizing a provision that could potentially damage their relationship with landlords.

Emphasizing the significance of security of tenure, it addresses the imbalance between landlords and tenants.The Federal Court case, which received funding from the Australian Competition and Consumer Commission, aimed to establish case law that defines acceptable commercial conduct. The text below consists of a list of references and websites related to contract law:

Bibliography

1. Atiyah, An Introduction to the
   

Law of Contract, (5th Edition, 1996, Oxford university Press) 300

Web Sites

1. http://www.austlii.edu.au
2. http://uniserve.edu.au/law/pub/edinst/anu/contract/HomePage.html


3. http://www.consumer.act.gov.au/CAB/publications/unconscionable.html


4. http://www.theage.com.au/bus/20000719/A14836-2000Jul18.html

List of Cases

1. Commercial Bank of Australia v Amadio, (1983) 57 ALJR 358
2. Lloyds Bank v Bundy (1975) QB 326 at 339
3. Acts sighted
4. Moneylenders Act 1900 UK
5. Trade Practices Act 1974 Cwth
6. 1 P.S Atiyah, An Introduction to the law of Contract,(5th edition,1996,Oxford University Press),300.
7. 2 (1975)QB326at339.
8. 3(1985)1 AIIER821.
9. 4(1983)57ALJR358.