Unconscionable Bargains

Vitiation of Contracts proposes a new theory to explain the rationale of general vitiating factors in English contract law. It provides a clear link to voluntariness as the foundation of contractual liability and compares the English position, in light of this theory, with the Principles of International Commercial Contracts (PICC), the Principles of European Contract Law (PECL), the Draft Common Frame of Reference (DCFR) and the US Restatement (Second) of Contracts.

"Duress, Undue, Influence and Unconscionable Dealing are grounds on which a contract can be set aside because the claimant was induced to enter into it by means which the law considers unacceptable. Professor Enonchong provides a detailed and rigorous analysis of the circumstances where an otherwise valid transaction can be avoided on each of these grounds. Duress : Duress is a common law doctrine under which a contract may be avoided where the complainant was induced to enter into it by illegitimate pressure, such as a threat of physical violence, a threat to seize or damage property or economic pressure. Undue Influence : There are two doctrines of undue influence: the equitable doctrine of undue influence is concerned with lifetime transactions (such as contracts), while the probate doctrine of undue influence is concerned with wills. The equitable doctrine of undue influence deals with cases where one person has acquired influence over another, and the ascendant person abuses that influence to induce the other person to enter into a lifetime transaction. It includes an evidential presumption of undue influence in certain cases. Probate undue influence applies in relation to wills. It allows the court to refuse to admit a will to probate where the testator was induced to sign the will by the exercise of undue influence. Unlike equitable undue influence, probate undue influence does not include an evidential presumption of undue influence. Abuse of Confidence : The book also discusses the equitable doctrine of abuse of confidence, which is sometimes confused with, but is different from, the equitable doctrine of undue influence. The doctrine of abuse of confidence is concerned to protect a person (the principal) who has placed confidence in another person (the fiduciary) from abuse of that confidence in any transaction between the fiduciary and the principal (as where a solicitor buys property from his client). Unconscionable dealing : Unconscionable dealing or unconscionable bargains is an equitable doctrine that provides protection to weaker parties in certain situations. The court will intervene on this ground to set aside a contract where, at the time of the contract: one party was suffering from some serious disadvantage, such as poverty, ignorance, illness, or otherwise, so that the circumstances existed of which unfair advantage could be taken; that weakness was exploited by the other party ("the stronger party") in a morally reprehensible manner; and the resulting transaction is extremely one-sided in favour of the stronger party" -- Publisher's website.

The decision of the Court of Appeal in the unconscionable bargain case of Nicols v Jessup [1986] BCL 1573 helps to clarify the approach which New Zealand courts should take on unconscionability cases in light of the Privy Council decision in O'Connor v Hart [1985] 1 NZLR 159.