Quiz
Module 8 - Unconscionable conduct
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1Unconscionable conduct is the principle a court of equity will enforce to prevent a stronger party from [blank_start]exploiting[blank_end] a disadvantaged party to gain a benefit.
- Aexploiting
2Elements
Justice Deane’s judgement in Amadio makes it clear that two things need to be shown to make out a claim of unconscionable conduct:
1. the disadvantaged party was under a [blank_start]special disability[blank_end] when dealing with the stronger party with the consequence that there was an absence of any reasonable degree of equality between them, and
2. that disability was sufficiently [blank_start]evident[blank_end] to the stronger party to make it prima facie unfair or “unconscientious” that he or she procure, or accept, the disadvantaged party’s assent to the contract in the circumstances in which he or she procured or accepted it.- Aspecial disability
- Bevident
3The cases make clear that the disadvantaged party must show that he or she was not just at a disadvantage when dealing with the stronger party, but at a “[blank_start]special[blank_end]” disadvantage.
- Aspecial
4Often a disadvantaged person will be at a special disadvantage due to a combination of factors. Justice Fullagar’s judgement from Blomley v Ryan (1956) 99 CLR 362 is often cited as demonstrating what factors can amount to a special disadvantage:
“The circumstances adversely affecting a party, which may induce a court of equity either to refuse its aid or set a transaction aside, are of great variety and can hardly be satisfactorily classified. Among them are poverty or need of any kind, sickness, age, sex, infirmity of body or mind, [blank_start]drunkenness[blank_end], [blank_start]illiteracy[blank_end] or lack of [blank_start]education[blank_end], lack of [blank_start]assistance[blank_end] or [blank_start]explanation[blank_end] where assistance or explanation is necessary. The common characteristic seems to be that they have the effect of placing one party at a serious disadvantage vis-a-vis the other.”- Adrunkenness
- Billiteracy
- Ceducation
- Dassistance
- Eexplanation
5The courts have recognised that a special disadvantage may be “[blank_start]situational[blank_end]” rather than “constitutional”. Most of the factors listed in Fullagar J’s quote above would be “constitutional” because they are inherent in the disadvantaged party and would work as a disadvantage when dealing with anyone. However, a disadvantaged party can be at a “[blank_start]situational[blank_end]” special disadvantage not because he or she is inherently at a disadvantage due to illness, age, infirmity, illiteracy, etc, but because of an [blank_start]emotional attachment[blank_end] to the particular stronger party: Louth v Diprose.
- Asituational
- Bsituational
- Cemotional attachment
6Apart from the disadvantaged party proving that he or she was at a special disability with the stronger party, the disadvantaged party must also show that the stronger party was [blank_start]aware[blank_end] of that special disadvantage.
- Aaware
7Knowledge/aware of special disadvantage/disability = It is only then that the transaction would be “[blank_start]exploitative[blank_end]”.
- Aexploitative
8The High Court recently clarified what level of knowledge must be proved before a stronger party can be said to have acted unconscientiously. In Kakavas v Crown Melbourne Ltd, the High Court said that a stronger party must either:
1. Have [blank_start]actual notice[blank_end] of the disadvantaged party’s special disadvantage.
2. Be [blank_start]wilfully ignorant[blank_end] of the disadvantaged party’s situation.- Aactual notice
- Bwilfully ignorant
9Rebutting the presumption of exploitation
The following should be taken into account:
1. Adequacy of [blank_start]consideration[blank_end]
2. [blank_start]Fairness[blank_end] of the terms
3. Independent [blank_start]advice[blank_end] or other assistance- Aconsideration
- BFairness
- Cadvice
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- Description
- 2 Applied Contract Law Quiz on Module 8 - Unconscionable conduct , created by Laura C on 21/06/2016.
- Author
- Laura C
- Language
- English
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