1. Lecture 8 Undue Influence, Unconscionable Conduct, Rescission, Misleading or Deceptive Conduct

2. Undue Influence

3. Categories of presumed influence [stronger][weaker] Parent – child Guardian – ward Solicitor – client Doctor – patient Spiritual advisor – member of flock

4. Factors going to de facto undue influence 1.Standard of intelligence/education 2.Character 3.Personality 4.Age 5.State of health 6.Experience 7.Blood relationship

5. Garcia v National Australia Bank It is unconscionable for a lender to enforce a guarantee against a wife where: a. the wife did not understand the purport and effect of the transaction b. the wife was a volunteer (ie gained no benefit herself from the transaction) c. the creditor is assumed to understand that the nature of the relationship of trust between husband and wife is such that the husband may not have fully explained the effect of the transaction to the wife; and d. the creditor did not take steps to explain the transaction to the wife, or to ensure she had independent advice.

6. Elements of Unconscionability 1.One party is under a special disability 2.Stronger party takes advantage 3.Unconscionable to retain benefit thus obtained

7. Special Disability Poverty/need Sickness Age Infirmity of body/mind Drunkenness Illiteracy Lack of education Lack of assistance Lack of explanation where necessary

8. Contracts Review Act 1980 (NSW) s 9(2): lists factors court can take into account s 7: remedies s 17: makes void any provision purporting to exclude operation of the CRA s 18: criminal penalties for trying to exclude

9. Unfair Contract Terms Regime Elements: 1.it must be a consumer contract, AND 2. it must be a standard form contract, AND 3. it must contain a term that is unfair

10. Consumer contract Goods or services acquired by an individual predominantly for for personal, domestic or household use.

11. Standard Form Contract Prepared by one party Not subject to negotiation Offered on ‘take it or leave it’ basis

12. ‘Unfair’ term 1.It would cause a significant imbalance in the parties’ rights and obligations arising under the contract; and 2.It is not reasonably necessary in order to protect the legitimate interests of the party who would be advantaged by the term; and 3.It would cause detriment (whether financial or otherwise) to a party if it were to be applied or relied on

13. Principles of Application 1.‘Misleading or deceptive conduct’ is interpreted broadly

14. Principles of Application 1.‘Misleading or deceptive conduct’ is interpreted broadly 2.Strict liability

15. Principles of Application 1.‘Misleading or deceptive conduct’ is interpreted broadly 2.Strict liability 3.In ‘trade or commerce’