LLB202 Study Guide - Final Guide: Unconscionability, Rescission
1. Unconscionable Conduct –
10.1 Unconscionability at Common Law
Equity may grant relief for unconscionable conduct where
1. One party is in a position of special disadvantage
2. The other party knows or ought to know of that special disadvantage and takes unfair
advantage of their position
(Commercial Bank of Australia v Amadio)
10.1.1 Special Disadvantage
Special disadvantage has been defined as ‘one which seriously affects the ability of the
innocent party to make judgement as to his or her best interests, when the other party knows
or ought to know of the existence of that condition or circumstances and the effect of this on
the innocent party’.
Special disadvantage is not confined to ‘constitutional disadvantage’ but also includes
‘situational disadvantage’ arising out of an intersection of legal and commercial
circumstances in which the plaintiff may find themselves.
Relevant circumstances include: poverty, sickness, age, sex, infirmity of body or mind,
drunkenness, illiteracy or lack of education and a lack of explanation or assistance where
assistance or explanation is necessary (Blomley v Ryan).
A person will not be in a position of ‘special disadvantage’ merely because of an inequality in
bargaining power (Australian Competition and Consumer Commission v CG Berbatis
Holdings Pty Ltd).
It is not necessary for the stronger party to have created the special disadvantage under which
the weaker party is labouring (Louth v Disprose).
Emotional dependence has been recognised as a relevant disadvantage that might constitute a
ground to set aside a transaction as unconscionable (Louth v Diprose).
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