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Avoidance of contracts: Unconscionable conduct

Overview

Unconscionable conduct deals with transactions between dominant and weaker parties; it therefore overlaps with duress and undue influence. Unconscionable conduct is prohibited both in equity and, more recently, by statute.


Unconscionable conduct in equity

Equity intervenes where one party has taken advantage of a 'special disability' (most commonly age, illiteracy, lack of education or a combination of factors) held by the other. The resulting transaction must normally also be harsh and oppressive to the weaker party. Where established the weaker party may choose to avoid the transaction.


Statutory unconscionable conduct

The Australian Consumer Law introduced nationally consistent prohibitions on unconscionable conduct (Part 2-2 of the ACL). The first of these prohibitions entrenches into statute the equitable doctrine of unconscionable conduct, thereby extending the range of remedies available to parties affected by unconscionable conduct. The second prohibition extends the concept of unconscionability beyond that recognized in equity and can be relied upon by all persons, other than listed corporations, who acquire or supply goods or services in trade or commerce.

See Australian Consumer Law Unconscionable Conduct page for more detail