The Backbone of Equity - Unconscionability

 To simplify hundreds of years of legal development - law can be divided into three main categories - the common law (ie decisions made by the Court), statutory law (ie legislation made by Parliament) and equity.

Equity was intended to be a flexible system of law running parallel to the formal rules and principles applied by the Courts over many years. Equity will intervene where the established common law remedy is insufficient. 

Unconscionability

Unconscionability is the cornerstone of equity and a key element of most (if not all) equitable causes of action. Unconscionability is anything so manifestly unfair, unequal or unjust that it goes against good conscience. The unconscionability of a situation is borne out by the facts of the case and is a matter for the discretion of the Court.

Common examples of situations where unconscionability may exist are as follows:

1. One of the parties holds a far stronger bargaining position;
2. The stronger party has undue influence, or places undue pressure (called “duress”) upon the weaker party;
3. The weaker party is under a ‘special disadvantage’ and the stronger party exploits that ‘special disadvantage’;
4. Where the stronger party will not negotiate;
5. Where the stronger party has imposed conditions on the weaker party not necessary to protects the stronger party’s legitimate interest;
6. Where there has been a breach of good faith or fiduciary duty.

If you have further questions, please contact us at frank@franklaw.com.au.

This is not legal advice.