Section 16 (3) of the Contracts Act 1957: Where a person who is in a position to dominate the will of another, enters into a contract with him, and the transaction appears, on, the face of it or on the evidence adduced, to be unconscionable, the burden of proving that the contract was not induced by undue influence shall lie upon the person in a position to dominate the will of the other. Section 16(3) placed unconscionable bargain as a part of proving undue influence. Relying on an Indian case of Poosathurai v Kannappa Chettiar, the Privy Council observed that an agreement is considered `unconscionable’ within the definition of section 16 (3) when the lender is in a position to dominate the will of the borrower. In Ragunath Prasad v Sarju Prasad , the Privy Council raised a question of whether the lender was in a position to dominate the will of the borrower must first be resolved before determining whether the bargain was unconscionable. In National Westminster Bank plc v Morgan, Lord Scarman referred to Poosathurai case and said that a court could set aside an undervalued transaction as unconscionable if it was shown or could have been presumed to have been obtained by undue influence. The decision in Poosathurai was further reaffirmed in Polygram Records Sdn Bhd v The Search & Anor . Thus, unconscionability is so closely related to undue influence that it cannot have a separate existence under section 16 (3) but it is limited to procedural and evidential purposes only. Conclusion The doctrine of unconscionability and the related principle of inequality of bargaining power are evolving, yet, not completely settled areas of the law of contract. Although both doctrines share similar objectives which are equitable in nature to p... ... middle of paper ... ...ally induced the transaction through influence given by the party. In the case of Lloyd’s Bank v Bundy , Lord Denning suggested the principle of ‘inequality of bargaining power’ that contractual validity requires at least some level of fairness. However, in National Westminster Bank v Morgan , Lord Scarman said that Lord Denning’s view led to some confusion, that, while the “fact of an unequal bargain” will be a “relevant feature in some cases of undue influence,” it can never become “an appropriate basis of principle of an equitable doctrine” concerned with commercial contracts. Lord Scarman warned that, There is no precisely defined law setting the limits to the equitable jurisdiction of a court to relieve against undue influence. This is the world of doctrine, not of neat and tidy rules . . . A court in the exercise of this jurisdiction is a court of conscience.
The decision of the House of Lords in City of London Building Society v Flegg marks a key stage in how the balance is drawn between occupiers and creditors in priority disputes; the seeds of which were originally planted in the Law of Property Act 1925. It posed a serious challenge to the conventional understanding of overreaching and the machinery of conveyancing.Ref ?
In Palgo Holdings v Gowans , the High Court considered the distinction between a security in the form of a pawn or pledge and a security in the form of a chattel mortgage. The question was whether section 6 of the Pawnbrokers and Second-hand Dealers Act 1996 (NSW) (‘the 1996 Pawnbrokers Act’) extended to a business that structured its loan agreements as chattel mortgages. In a four to one majority (Kirby J dissenting) the High Court found that chattel mortgages fell outside the ambit of section 6 of the 1996 Pawnbrokers Act. However, beyond the apparent simplicity of this decision, the reasoning of the majority raises a number of questions. Was it a “turning back to literalism” as Kirby J suggested, or was it simply a case where the court declares that parliament has missed its target?
The valid point is concerned with Goodhart’s article “Determining the Ratio Decidedi of a Case. Simpson accepts the Goodhart theory proposition that ‘‘the ratio decidendi of a case can be defined as the material facts of the case plus the decision thereon.” He points out that there is an opposed theory, which maybe conveniently called ‘classical theory’ which is that “the ratio is ‘the principle of law which the judge considered necessary to his decision.’’ The Supreme Court’s approach to the illegality defence in decisions, bringing tension in judicial decision between the need for legal certainty and need to achieve fair result. Therefore, quantitative research on whether extra-legal factors influenced judicial decision making has found no universally applicable answers as some variables can explain certain judicial behaviour in some situations but, both in others. When interpreting and applying legislations, to decided case, especially when cases involve ambiguous aspect of a statute which is statutory interpretation; which over time, various methods and construction has fallen in and out of favour including the primary rules (literal,mischief
Once the Social Contract is agreed to, an absolute power is given to the body politic and, “...it is the same power w...
Having evaluated the current state of English contract law, mainly made up of piecemeal solutions, it can be seen that despite being satisfactory and doing its job, there still remain gaps within the law of contract where unfairness is not dealt with. Moreover, due to the ad hoc nature of those piecemeal solutions, the latter have often produced inconsistent justice and have manifested cases of unfairness. Hence, “a relatively small number of respected Justices have endeavored to draw attention to the fact that the application of a general principle might be useful and even necessary in English law.”
Given that it lies within the domain of equity, the case law indicates a great flexibility in its application, both in the substantive requirements of proof demanded by the courts and in the manner in which the courts will satisfy the equity. It is the first of these aspects of the doctrine that I will examine in this essay. I will look at the shift in the evidentiary requirements and what a representation (or an assurance of rights), a reliance (a change of position on the basis of that assurance) and a detriment (or unconscionable disadvantage) - the three pre-requisites for a successful claim - have come to mean with regard to case law and in particular the judgement of Judge Robert Walker in the Court of Appeal in Gillett v. Holt[1], in which the plaintiff had been given repeated assurances over many decades that he would inherit the defendant's estate, and remained in service to him at least p... ... middle of paper ... ... operty, 16th Ed, Butterworths K. Gray & S.F Gray - Land Law, 2nd Ed, Butterworths Professor Cedric D Bell - Land: The Law of Real Property, 3rd Ed, Old
Lord Denning described estoppel succinctly as ‘a principle of justice and equity. It comes to this: when a man, by his words or conduct, has led another to believe in a particular state of affairs, he will not be allowed to go back on it when it would be unjust or inequitable for him to do so’ . Proprietary estoppel in turn is an informal method by which proprietary rights can arise. It can provide a defence to an action by a landowner who seeks to enforce his strict rights against someone who has been informally promised some right or liberty over the land. In turn it can be used as a defence or a cause of action. In order to show how the two doctrines are quite similar, a description of the elements of proprie...
...Although this theory is very rational and scholarly it again asks for a very ideal situation of fairness where the chances of both disputants coming to these terms seems unattainable. Also, it is quite obvious that what one sees as fair, another may not. All the same, the theory by itself provides great principles for negotiation that if followed honestly by both parties would most likely lead to a satisfactory agreement.
The legal issue of constitution of trusts is very important, judicial decisions over the years on cases where trusts were not properly constituted indicates that constitution of trusts could be quite complex and must be very cautiously done by a property owner as a simple factor could make his trust void. An express trust is completely constituted either by effectively transferring property to trustees or by effectively declaring a trust. In case of personal property, the declaration of the trust may be put in writing; however, equity will not perfect an imperfect gift. It is only when the trust is constituted that it is binding on the settlor. The long-standing idea that equity will not perfect an imperfect gift can be traced back to the 19th century cases of Ellison v Ellison and Milroy v Lord , and was further emphasized in the 20th century in the case of Re Fry .
Both the common law and the statutory law have recognized the weaker position of consumers. It is well established an exclusion clause will be valid and enforceable only if it is incorporated in the contract, use clear wordings and does not contravene statutory limits. In order to limit the unfairness resulting from exclusion clauses, the courts have developed certain principles such as the doctrine of non est factum in signature cases, ‘red ink-red hand’ principle in relation to ‘onerous or unusual’ terms, contra proferentem rule when interpreting ambiguous exclusion clauses and ‘fundamental breach’ principle.
It has been asked in the given scenario to evaluate Neuberger LJ's approach to the relationship between the doctrines of the constructive trust and proprietary estoppel. To evaluate that, it is necessary to explain the definition of the constructive trust and proprietary estoppel .
This case mentioned below is a fine example of understanding the Law of Contract in a better manner. (Gerald, 2014).
1.The strict supremacy of statute over judicial decisions and a tradition of literalism in statutory interpretation, 2. Where no legislation exists, the courts are bound by the doctrine of precedent in accordance with a strict hierarchy of judicial authority, 3. In the absence of a relevant precedent, the judges will be guided by legal principle and reasoning by analogy, and 4. There is clear way of distinguishing the ratio of a case…
The old common law had a doctrine of absolute contract under which contractual obligations were binding no matter what might occur (Paradine v Jane, 1647). In order to ease the hardship which this rule caused in cases where the contract could not be properly fulfilled through no fault of either party but due to occurrence of unforeseen events, the doctrine of frustration was developed.
Based on common law and precedent, the English law of contract has been formulated and developed over a number of years with it’s primary purpose to provide a regulated framework within which individuals can contract freely. In order to ensure a contract is enforceable there are certain elements which must be satisfied, one of which is the doctrine of consideration. Lord Denning famously professed; “the doctrine of consideration is too firmly fixed to be overthrown by a side wind” . This is a crucial indication that consideration has long been regarded as the cardinal ‘badge of enforceability’ in the formulation and variation of contracts in English common law.