Plaintiff leased a property to Defendant, whose affairs were managed by her brother, X, since she was “quite slow”.
When X was away, Plaintiff got a lawyer to draw up a new lease at a much higher rent and although the lawyer warned Defendant that it would not be in her interest to sign, she insisted on doing so.
Defendant wanted to set aside the new lease as an unconscionable bargain and PC allowed this.
There are several points regarding when and how equitable fraud can vitiate a contract:
For equity to be invoked the agreement must be unconscionable in that “one of the parties to it has imposed the objectionable terms in a morally reprehensible manner”;
“Unconscionable” relates to to the terms of the bargain AND to the moral culpability of the stronger party;
There has to be both unequal bargaining power and an abuse of that power;
There has to actually be unconscionable conduct and it isn’t enough that the terms are unfair or imbalanced;
The burden is on the party seeking relief to show unconscionable conduct, “namely that unconscientious advantage has been taken of his disabling condition or circumstances”.
Mckendrick: It is odd that the bargain was set aside despite Plaintiff getting good legal advice not to sign from the lawyer.
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Contract Law | Contract Law Problem Question Summary Notes (157 pages) |