15. Undue Influence, Unconscionability, and Equality of Bargaining Power

2021 ◽  
pp. 500-533
Author(s):  
André Naidoo

This chapter examines undue influence, which is largely about pressure and influence arising from a relationship. It begins with the basic role of the law on undue influence before moving to the substantive case law. The case law is divided into three categories, which are based on the different ways of proving undue influence. The first relates to what is known as ‘actual undue influence’, which is where a complainant proves undue influence. The second is where undue influence between two parties can be presumed from the circumstances. The third category has been a major problem in modern cases and it involves undue influence coming from a third party. The chapter then turns to the wider issues that complete the ‘bigger picture’. The first of these is the area often referred to as ‘unconscionability’, which is about the exploitation of weakness. The second is the attempt to create a wider ‘inequality of bargaining power’ principle. Finally, the chapter looks at the Consumer Protection from Unfair Trading Practices Regulations 2008, which can cover conduct otherwise classed as duress, undue influence, and harassment.

Author(s):  
Ly Tayseng

This chapter gives an overview of the law on contract formation and third party beneficiaries in Cambodia. Much of the discussion is tentative since the new Cambodian Civil Code only entered into force from 21 December 2011 and there is little case law and academic writing fleshing out its provisions. The Code owes much to the Japanese Civil Code of 1898 and, like the latter, does not have a requirement of consideration and seldom imposes formal requirements but there are a few statutory exceptions from the principle of freedom from form. For a binding contract, the agreement of the parties is required and the offer must be made with the intention to create a legally binding obligation and becomes effective once it reaches the offeree. The new Code explicitly provides that the parties to the contract may agree to confer a right arising under the contract upon a third party. This right accrues directly from their agreement; it is not required that the third party declare its intention to accept the right.


2021 ◽  
Vol 10 (1) ◽  
pp. 73-102
Author(s):  
Paulina Konca

This paper presents the role of some intrinsic sources in legal interpretation. Some of linguistic aids follow from provisions of the law and other from the commonly accepted ruling practice or views expressed in literature. The position of those aids was verified through the analysis of case-law, literature, and provisions of law. The first section and second section focus on the priority of plain meaning rule and intrinsic sources in legal interpretation which is strongly emphasized in legal literature, case-law and the interpretative provisions of many countries. Next, it presents how certain linguistic tools work in case law practice, what problems they can cause and what problems they can solve. The third point addresses the use of dictionaries as tools of linguistic interpretation. The fourth section explores the role of selected interpretative canons often found in legal regulations and case law practice: ordinary meaning canon, gender/number canon, ejusdem generis canon, presumption of consistent usage and prefatory-materials canon. It is concluded that the priority of a linguistic interpretation is not absolute and can never be understood as its exclusivity. Linguistic tools are not in themselves determinants of correct meaning. In order to make a correct interpretation, it is necessary not to be guided, by indications labelled as objective, sometimes artificially imposed, but by the intention of the legislator, which such tools may discover and should only be used for that purpose. 


Contract Law ◽  
2020 ◽  
pp. 662-679
Author(s):  
Ewan McKendrick

This chapter considers a group of cases in which the courts have been asked to grant relief on the basis that the contract concluded between the parties was, in some way, unfair, outlining examples drawn both from the common law (including equity) and from statutes. The rise and fall of a doctrine of inequality of bargaining power is also noted. It then considers the arguments in favour of drawing these disparate cases together into one general doctrine, and concludes by drawing on some academic reflections on the case-law and the role of fairness in the law of contract more generally.


Author(s):  
Ewan McKendrick

This chapter considers a group of cases in which the courts have been asked to grant relief on the basis that the contract concluded between the parties was, in some way, unfair, outlining examples drawn both from the common law (including equity) and from statutes. The rise and fall of a doctrine of inequality of bargaining power is also noted. It then considers the arguments in favour of drawing these disparate cases together into one general doctrine, and concludes by drawing on some academic reflections on the case-law and the role of fairness in the law of contract more generally.


Author(s):  
Ewan McKendrick
Keyword(s):  

This chapter discusses cases of alleged undue influence. Such cases have caused considerable difficulties for the courts in recent years, not in relation to the existence of the doctrine, but to its scope and its relationship with other doctrines, particularly duress, and other cases in which courts have intervened to protect the vulnerable or those who have been exploited. Recent judicial exposition of undue influence has tended to take place in the context of three-party cases rather than two-party cases, that is to say cases in which a wrong has been committed by a third party and not the defendant. Two leading cases of undue influence are analysed: Allcard v. Skinner (1887) 36 Ch D 145 and Royal Bank of Scotland plc v. Etridge (No 2) [2001] UKHL 44, [2002] 2 AC 773 and they are used to illustrate the limits of the modern doctrine of undue influence and in particular the role of presumptions in this area of the law.


Contract Law ◽  
2020 ◽  
pp. 635-661
Author(s):  
Ewan McKendrick
Keyword(s):  

This chapter discusses cases of alleged undue influence. Such cases have caused considerable difficulties for the courts in recent years, not in relation to the existence of the doctrine, but to its scope and its relationship with other doctrines, particularly duress, and other cases in which courts have intervened to protect the vulnerable or those who have been exploited. Recent judicial exposition of undue influence has tended to take place in the context of three-party cases rather than two-party cases, that is to say cases in which a wrong has been committed by a third party and not the defendant. Two leading cases of undue influence are analysed: Allcard v. Skinner (1887) 36 Ch D 145 and Royal Bank of Scotland plc v. Etridge (No 2) [2001] UKHL 44, [2002] 2 AC 773 and they are used to illustrate the limits of the modern doctrine of undue influence and in particular the role of presumptions in this area of the law.


Author(s):  
Chris James Pretorius

In Slip Knot Investments v Du Toit 2011 4 SA 72 (SCA) the Supreme Court of Appeal had to determine if the material mistake of a contractual party induced by the fraud of an independent third party could sustain a plea of iustus error raised by the mistaken party. The position prior to this decision was uncertain and characterised by inconsistency, mostly occasioned by the application of the iustus error doctrine together with fault. The Supreme Court of Appeal found that in the circumstances the mistaken party was liable, despite the fraud of the third party, on the basis of the reliance theory. The decision is commendable for bringing a measure of certainty to the law of mistake on this point and indicating that the reliance theory (as opposed to the iustus error doctrine) is the appropriate means to resolving such cases. Nevertheless, it is suggested that although the general rule implied by the court's approach is entirely apposite, there may well be exceptional instances where on the basis of relevant policy considerations the reliance theory should not prevail and the mistaken party should be absolved from contractual liability. In this manner reliance, which at first seems reasonable for being induced by the conduct of the contract denier, may upon further reflection be regarded as unreasonable based on the consideration of risk creation at the hand of the contract assertor, for instance. Admitting exceptions in appropriate circumstances would also provide a degree of consonance with earlier case law, where, even if the court's approach was open to theoretical criticism, a court has intuitively felt that liability should not lie.


2005 ◽  
Vol 26 (3) ◽  
pp. 763-786
Author(s):  
Claude-René Dumais

The new Consumer's Protection Act came wholly into force on April 30, 1981 under the title of Chapter P 41.1 of the Q.R.S., replacing and clarifying the former Consumer's Protection Act enacted in 1974 as Chapter 74. The new Act goes so far as to change some century-old rules of the Civil Code, including the law of proof, all in favour of a better deal for the consumer. In almost every case of abuse or violation of any section of the Act, the consumer must simply prove that the merchant violated one or more of its sections in order that penalties of sections 271 and 272 apply. The types of applicable penalties depend on the offence : Did the businessman simply overlook what the Act considers a mere formality ? Then the contract is voidable where a defence of lack of interest lies. Did the businessman contravene what the Act considers a fundamental right of the consumer? The consumer has a choice of remedies : — execution of the obligation by a third party ; — reduction of costs ; — annulment or resolution of the contract, the whole with a possible demand of damages, real and exemplary. The article explains the differences between form and substance as accepted by statute or case law, and the solutions applied. The correlation with other parts of the Civil Code, untouched by the Consumer Protection Act, is also studied, both in matters of proof, intent, and possible unjust enrichment of the consumer.


Author(s):  
Chen Lei

This chapter examines the position of third party beneficiaries in Chinese law. Article 64 of the Chinese Contract Law states that where a contract for the benefit of a third party is breached, the debtor is liable to the creditor. The author regards this as leaving unanswered the question of whether the thirdparty has a right of direct action against the debtor. One view regards the third party as having the right to sue for the benefit although this right was ultimately excluded from the law. Another view, supported by the Supreme People’s Court, is that Article 64 does not provide a right of action for a third party and merely prescribes performance in ‘incidental’ third party contracts. The third view is that there is a third party right of action in cases of ‘genuine’ third party contracts but courts are unlikely to recognize a third party action where the contract merely purports to confer a benefit on the third party.


Author(s):  
Masami Okino

This chapter discusses the law on third party beneficiaries in Japan; mostly characterized by adherence to the German model that still bears an imprint on Japanese contract law. Thus, there is neither a doctrine of consideration nor any other justification for a general doctrine of privity, and contracts for the benefit of third parties are generally enforceable as a matter of course. Whether an enforceable right on the part of a third party is created is simply a matter of interpretation of the contract which is always made on a case-by-case analysis but there are a number of typical scenarios where the courts normally find the existence (or non-existence) of a contract for the benefit of a third party. In the recent debate on reform of Japanese contract law, wide-ranging suggestions were made for revision of the provisions on contracts for the benefit of third parties in the Japanese Civil Code. However, it turned out that reform in this area was confined to a very limited codification of established case law.


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