Unconscionability as the Basis of Rendering a Contract

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ASSIGNMENT “Discuss whether the doctrine of unconscionability is appropriate to form the underlying basis for a claim of voidable contract on the ground of undue influence” TABLE OF CONTENT

  1. Introduction
  2. Common Law Countries’ Position
    1. England
    2. Australia
    3. Canada
  3. Malaysia’s position
  4. Conclusion
  5. Bibliography

Introduction According to the Contract Act[1], in section 16(3) when a person entered into a contract with a person who has the position to dominate the will of another, and the transaction appears to be unconscionable, the burden to prove that the contract is not by undue influence lie on the person who has the will to dominate another. Here, it seems that the act was saying the unconscionability is an element of undue influence. However, do the doctrine of unconsionability can be regarded as an underlying basis of the Undue Influence? Doctrine of unconscionability is application of consent based obligations, where someone’s consent to bargain was only procured through external pressure that another person exploited. Basically, unconscionable contract is held unenforceable because no reasonable person would agree otherwise to it. The perpetrator is not allow to benefit, as the consideration is lacking, and to enforce the contract will be unfair. For the defence of unconscionability to apply, contract has to have been unconscionable, that later, the circumstances make the contract irrelevant Unconscionability is understood by jurists as a doctrine used by the court of equity to correct men’s conscience against unconscionable. Until now, inspiring writings and discussions have been made concerning the supposed or probable definition, description, criteria and application of the doctrine Undue influence is the use of power or influence by one person over another in such a way that the stronger party acquires a benefit, either for himself or for some other person.[2] The equitable construct of fiduciary relationships is associated with the doctrine of undue influence, which is distinguished from duress, the threat or use of excessive force. Cases of undue influence are founded upon the principle that one party is in a stronger bargaining position,[3] or has superior knowledge, or superior mental capacity than the other, weaker party who, as a result, relies on the stronger party. Common Law Countries’ Position For the purpose of this assignment, I will firstly discuss the position of the Common Law countries, which are England, Canada and Australia on the use of doctrine of unconscionability as the basis of undue influence. England In cases of undue influence, a relationship exists where one party owes the other an obligation of candor and protection, where the former acquires over the latter a measure of influence, of which the ascendant person then takes unfair advantage. Allcard v. Skinner,[4] took place in the religious climate of nineteenth century England.Back then courts themselves had only recently been reformed then, the case highlighted the growth of undue influence in the nineteenth century as a factor which could spoil a contract.

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