Subsidiarity of Unjust Enrichment †Free Samples to Students

Question: Discuss about the Subsidiarity of Unjust Enrichment. Answer: Introduction: Unconscionability can mean many things and may arise from a number of circumstances. In the present essay, an attempt has been made to explain and comment on these issues. The law has always been trying to find the ways in which protection Management can be provided to the rising number of consumers. Such provisions are present in the sister-in-law and also in the common law. The need for providing protection to consumers has been rising as a result of the large number of consumers who want to face disadvantage in their transactions due to the unfair practices adopted by businesses. In this way, the present essay also looks at the changes that have occured in the statutory law and also in common law (Carlin, 2002). A major decision given by the court in this regard was that of Commercial Bank of Australia Ltd. v Amadio (1983). This decision had a lot of impact on the doctrine of unconscionability. As a result, in the present essay, an attempt has been made to examine the effect of un conscionability on the contracts. At this point, it is worth mentioning that the decision given in Amadio's case was the first such a decision where the court relied upon the doctrine of unconscionability and as a result, this case can be described as the driving force behind the amendment of unconscionability that took place in the law of contract. Similarly, there has been a rising number of consumer protection laws that were introduced for the purpose of providing justice to the consumers and also to enforce the "unconscionable conduct" laws that may be present in the contracts concluded between the parties. Generally, the trader has the ownership of the business transactions and as a result, it is also the responsibility of the trader to ensure that the transaction created between the parties can be described as fair and reasonable. In this way, unconscionability can be described as a doctrine of contract law that has been initially introduced for the purpose of maintaining fair play and equity. As a result, the term unconscionable conduct can be described as being associated with the behavior as a result of which the court may be required to provide relief to the other party. This doctrine was used by the High Court in Blomley v Ryan (1956). But the application of unconscionability in contract law, received significant strength when this doctrine was used by the court in the decision given in Amadio's case. Consequently, it will be helpful to briefly describe the effects of this case. Mr. and Mrs. Amadio were an elderly migrant couple from Italy. They had provided guaranteed for the loan taken by their son. In this case, the loan was taken by their son's company from Commercial Bank of Australia. The bank manager had close relations with their son. At the same time, the manager of the bank was also well aware of the business realities. He also knew very well that perhaps their son, Vincenzo Amadio had made a misrepresentation to his parents for the purpose of obtaining the guarantee of his parents for the loan that he was going to take from the bank. After the loan was taken, the construction business of their son failed. The bank tried to enforce the guarantee that had been provided by Mr. and Mrs. Amadio and mortgaged their building with the bank. Under these circumstances, the issue that needed to be decided was if Mr. and Mrs. Amadio can be held to be bound by this transaction. Similarly if the contract of guarantee was enforceable against the elderly couple, particularly in view of the circumstances under which the contract was signed by them. It also needs to be mentioned that Mr. and Mrs. Amadio were in there advanced years of age. They also had little comprehension of English. Similarly, no professional and independent advice was provided to Mr. and Mrs. Amadio in relation with the contract. The court also noted the fact that even if the bank manager. Mr. Virgo, knew very well regarding the business situation of the company of Vincenzo but he also referred to keep quite instead of advising the elderly couple that they should seek independent advice regarding the contract. In this way the court noted the fact that at the time of the execution of the mortgage by Mr. and Mrs. Amadio, the bank was aware of the unstable financial position of the company of their son. The bank also knew the perhaps Mr. and Mrs. Amadio did not knew this fact and they were under the impression that the business of their son was going on well. Another important fact noted by the court was that while the elderly couple believed that their liability under the contract was limited to $50,000, the bank did not inform them that in fact, there liability as the guarantors for the loan, was unlimited. Under these circumstances, while delivering the decision, the court held that the bank manager knew very well that the elderly couple was facing a special disability. Still, the bank decided not to take any steps to make sure that Mr. and Mrs. Amadio were fully aware of the transaction. Consequently Management, the court stated that an advantage has been taken by the bank regarding the o pportunity that was available to it and this was unconscientious. According to the court, the doctrine of unconscionability relied on this underlying basis. After the decision given in this case, the concept of unconscionability became a part of contract law. Similarly, changes also took place in the statutory law as a result of this decision. The term unconscionability can be distinguished in two ways. First of all, there is the procedural unconscionability (Beatson and Virgo, 2002). It is related with the disadvantage suffered by the weaker party, while the negotiations are going on. In such a case, the stronger party has taken in one page of the fact that either the consumer does not have sufficient knowledge or understanding concerning the contract or an independent decision cannot be made by the consumer concerning the transaction (Paterson, Robertson and Duke, 2009). The law provides that if in such a case the trader had failed to mention to the consumer that certain avenues are available to the consumer for getting help him clearly understanding the terms of the contract, it is a lapse on part of the trader. Hence it can be conclu ded in such a case that the trader had tried to take advantage of the lack of understanding of the consumer and achieve a benefit for himself (Grantham and Rickett, 2001). The second case is of a substantive unconscionability. It deals with the unfairness of the terms of the contract or the outcome of the contract. It may also reveal that a party to the contract has to suffer undue influence or coercion while entering into the contract. Therefore in such a case, an independent decision cannot be made by the consumer as a result of the undue influence. While the general position is that the courts do not go into the question if a good bargain or bad bargain has been received by a party to the contract. However, this question will be explored by the court while it is deciding the issue if a chance was available to the party to decide if it was in their best interest to enter the contract or not (Kremer, 2001). In view of the fact that generally been unconscionable if he is alleged, a difference is present in the bargaining power of the parties, it is easy for individuals or small companies to allege unconscionability against large corporations. Hence, the introduction of the doctrine of unconscionability plays for the purpose of ensuring that the stronger party is aware of the fact that the other party is suffering from a special disadvantage (Kakavas v Crown Melbourne Ltd., 2013). As a result of the decision of the court in Amadio case, it is required from the stronger party to establish in the court that the contract created between the parties was fair, just and reasonable. Several developments have taken place in this field of law after the decision delivered by the court in Amadio's case. These changes included the amendments made in the earlier Trade Practices Act, 1974. At the same time, changes were also introduced in the Corporations Act, 2001 and ASIC Act, 2001. Similarly, some changes are also made in the various codes of conducts of the industry. For instance, reforms took place in the financial services sector after this decision. The effect of these changes was that now the main responsibilities of the ASIC to handle the issues related with consumer protection in financial field. The decision regarding the application of the unconscionable conduct provisions to the contracts dealing with financial services has to be made keeping in view the particular exclusion clauses and also the definitions that have been mentioned in the ASIC Act Management. The apex body in Victorian is the Financial and Consumer Rights Council for the financial counselors. Financial counselors are provided resources and support by the Council and it also promotes the needs of the consumers who have to deal with financial problems. Similarly, it is also the responsibility of the Council to provide information and advocacy to the consumers were facing problems in the financial sector. The Council works in tandem with the community sectors. At the same time, the services of the Council are provided for free to the consumers. Moreover, these services are independent and confidential. The main reason due to bridge these services are provided to the consumers is to advocate for the vulnerable consumers if they have to deal with financial difficulties. In order to fulfill this objective, the Council supports financial counselors. Similarly, the Council also helps through stakeholder relationships in order to create a systemic change. Similarly, the Council pr ovides support to the financial counseling sector through advocacy, law reform, case work, and through the adoption and maintenance of best practices. In the present context, consumer advocacy means to provide a voice to the affected consumers. When a review of the history of consumer advocates see in Australia is made, this view is further supported. Similarly, after considering the literature in which the term advocacy has been used and also after going through the mission statements of various organizations that are working as the consumer advocates, the same view appears to be present. At the same time, the view is also gaining support that further steps need to be taken if the voices of the consumers are not heard in Victoria (or if these voices are not sufficiently heard) as can be seen in other parts of Australia, and also in other countries. It is very significant that the consumer advocates should act as the voice of the consumers. At the same time, they should also act by considering the long-term interests of the consumers. The consumer organizations are required to be effective even if there are significant restraints present for them like the constraints of resources. As a result, generally, these organizations adopt the strategy of working smarter and harder as against the voices they are opposing. Similarly, these organizations also stretch the available resources beyond the natural constraints. Although it is difficult to claim that consumer advocacy has proved to be highly effective. As a result, it can be said that the present arrangements in Victoria related with consumer advocacy are still less effective than required. References Beatson J and Virgo, G J (2002) Contract, Unjust Enrichment and Unconscionability, 118 Law Quarterly Review 352 Carlin, T.M., (2002) The Rise (And Fall?) of Implied Duties of Good Faith in Contractual Performance in Australia, UNSWLawJl 4 Grantham R and Rickett, C (2001) On the Subsidiarity of Unjust Enrichment, 117 Law Quarterly Review 273 Kremer, B (2001) The Action for Money Had and Received, 17 Journal of Contract Law 93. Paterson, Robertson Duke, (2009) Contract: Cases and Materials, Lawbook Co, 11th ed. Paterson, Robertson Duke, (2009) Principles of Contract Law, Lawbook Co, 3rd ed. Blomley v Ryan (1956) 99 CLR 362 Commercial Bank of Australia v Amadio (1983) 151 CLR 447, 461 Concrete Constructions (NSW) Pty Ltd v Nelson (1990) 169 CLR 594 Kakavas v Crown Melbourne Ltd [2013] HCA 25 Louth v Diprose (1992) 175 CLR 621