Unconscionable Dealing

An equitable rule exists to protect a party who, at a clear disadvantage, enters a contract. There are three categories of unconscionable dealing:

 

  • Intoxication and mental incapacity: A party is not too badly effected to intend to be legally bound. But they are affected, and under the influence or manipulation of the counter-party.

  • Emotional dependence: A contract is formed where the personal relationship between the parties is so highly emotional that control is possible.

  • Lack of knowledge or education: A party having no understanding at all of what they are getting into can get out of a contract.

 

Commercial Bank of Australia v Amadio[1] furnishes a good example of unconscionable dealing. In this case there was both a lack of knowledge and education...

 

ORDER FOR FULL TEXT.

 

 

 

[1] Commercial Bank of Australia v Amadio (1983) 151 CLR 447.

Contract Law

Vitiating Factors