Discuss about the case study for Business Law of CLR.
The territories or the jurisdictions where the system of English common law applies, the word equity denotes that law body that emerged in the Chancery Court of England. Those Courts are now subject to administered with the common law concurrently. In the historical context, the common law of England developed principally for the administering the royal courts of the entre. The law that was administered by the Chancery Court was given the name of equity. The territories that made the inheritance of the system of common law have the difference in their treatment of the law of equity[1]. In the 20th century, there have been some systems of common law, that began to give less importance to the historical origin of the legal rules that are substantive. In the territories of Australia, England, and New Zealand, the system of equity law remains till date the distinctive body of practice by the practitioners who are specialized. The era of modern equity law makes the inclusion of the fiduciary law, equitable estoppel, relief against forfeiture and penalties, doctrines of subrogation, marshaling, and contribution.
In the case of Waltons Stores Interstate Ltd v Maher (1998) 164 CLR 387, there was negotiation on the part of Waltons with Maher regarding the factor of leasing of property, whose owner was Maher. Both the parties made the understanding that the building that was existing already in that property would be subject to demolition, and a new building is entitled to be constructed by Maher, which would be occupied by Waltons. The agreement between the two parties was done on rent and terms. The solicitors of Waltons sent a deed of the lease to Maher, and the solicitors of Maher made certain amendments in that deed and resent the same to Waltons. Maher then informed Waltons about the start of the commencement of demolition and demanded to make the completion of the lease deed quickly. Now when the building work was completed approximately 40%, Waltons declared that they do not wish to proceed with Maher. At this, Maher made a suit of law for making the enforcement of the agreement.
The Court in its majority held that despite there is no formal contract that has been exchanged between the two parties; Maher was entitled to make the assumption of the exchange of contract. The Court also made the fact clear that Maher could easily rely on the principle of promissory estoppel that makes its extension to the promises or the representations or any future conduct. Promissory estoppel in the territory of Australia is liable to use either as a ‘sword and a shield’. The Court held that the doctrine of promissory estoppel must be used for the purpose of providing the cause of action where any promise is made by the promisor[3]. The Court also held that the doctrine of promissory estoppel is applicable in those cases where the promisor is involved in the creation of an assumption that any contract would be in existence in the future, or there would be the performance of any promise in the future. The application of the doctrine of promissory estoppel also occurs in the event where the promisee relies on his or her detriment[4]. The doctrine of promissory estoppel is applicable in the situation where the promise is unconscionable about the conduct of the promisor, to that extent that the promisor ignores the promise.
In the case, there is the intervention of the principles of equity because there is unconscionable conduct on the part of Waltons to ignore such assumption. In this case, the non-exchanging of the contract does not amount to the unconscionable conduct, but there are two elements, that regarded the conduct of Waltons as unconscionable[5]. Those elements are the urgency factor and the execution of Maher by assuming that the execution by Waltons was the mere formality.
In these circumstances, the Court held that Waltons was under the obligation to make the communication with Maher regarding the demolition by having reasonable certainty and time. Waltons did not communicate, and the related evidence clearly stipulated that Waltons induced and encouraged Maher to continue with demolition work[6]. Therefore, the Court held that Waltons must be estopped from deviating from its promise of completion that was implied.
In the case the defendants, which is Mr. and Mrs. Amadio were involved in making the execution of a mortgage and guarantee in favor of the Commercial Bank of Australia, the appellant. The primary purpose of the execution of such mortgage was to guarantee the debts of the company of their son named Vicenzo Amadio. It was found that their son made the control of a number of companies and seemed to be successful. It was also found out that Vicenzo was in debts and made arrangements with the manager of the local bank for sending him cheques to maintain his company. After that, the bank gave him the advice that the overdraft facility for him could be increased in case there is security provided by his parents[7]. Hence, Vicenzo approached his parents for granting guarantee for $50,000 for a period of six months.
After the Amadios had made the signature on the guarantee, the Bank delivered money to their son. After the granting of the money, the financial condition of the company deteriorated, and it got liquidated. This made the Bank as the Amadios for the payment of the amount of the guarantee.
When the trial was undergoing, it was found by the judge that when the Amadios made the signature on the document of guarantee, there was the belief on the part of them their liability in the guarantee agreement was limited to the amount of $50,000 and that was also for the period of six months. The Court believed that the Amadios made the signature on the representation made by their son, and they would not have signed the documents of guarantee if they knew the true effect of their signature on the guarantee documents[8].
The Court in its decision held that the relief on the ground of unconscionable conduct is applicable in those cases where any party makes the unconscientious use of the position of superiority that held by him to the detriment of any party for which he sufferers from any special disability and is in the situation of special disadvantage[9]. The Court held that there had been the special disadvantage on the part of the Amadios vis-à-vis the Bank made it unconscionable for the Amadios to have faith on the said guarantee.
In the territory of New South Wales, there emerged a famous case between a brother and his sister regarding the ownership of a property. The defendant made the claim that during the purchase of the disputed property his age was twenty one and the age of his sister was fifteen years. The defendant also made the statement that his father has been involved in working on the Central Coast, and the family got divided as his mother was engaged in a work at Sydney. The only person who looked upon the property was the father of the defendant and the defendant himself[10]. The defendant also claimed that they made the payment of the property dues from the joint account of him and his father.
The Court in delivering its decision held that the doctrine of estoppel cannot be made applicable for the purpose of assisting any person who makes the hearing of any statement from any other person that, such person bears the intention of making him the property owner. The Court also held that such statement is neither valid nor subject to enforcement in the court as the person did not rely on that promise that was made to him. Therefore, the application if promissory estoppel got rejected by the Court.
Conclusion
The case studies that are discussed above can be used as examples where there are wide powers of discretion that are used or rather vested on the part of the courts to render its decisions in cases where there lies the ambiguity regarding the application of the rules of contract law. The principle or doctrine of promissory estoppel is a doctrine that is well defined, but it is still used by courts exceeding the scope of the meaning of the principle[12]. The cases that are mentioned above depicts clearly that the judges involved therein made the detailed analysis of the circumstances and the facts of the case and rendered its decision by going beyond the jurisdiction of common law. Hence, it can be said that the power of discretion refers to the personal choice of the judges. In simple terms, it means that the judges while using their discretionary power make the application of their conscience in rendering the decision in the case.
Reference List
Baker, Thomas A., III, John Grady and Jesse M. Rappole, ‘Consent Theory as a Possible Cure for Unconscionable Terms in Student-Athlete Contracts’ (2012) 22 Marquette Sports Law Review 619
Berman, James, ‘Consumer Law: Bargaining Power – the Grey Area between Freedom of Contract and Unconscionable Conduct’ (2010) 62 Keeping Good Companies 43
Duggan, Anthony J., ‘Stolen Goods, a Cruise Disaster and a Right of Way Gone Wrong: Three Unconscionable Contracts Cases from a Law and Economics Perspective’ (2004) 40Canadian Business Law Journal 3
Hall, Peter M., Unconscionable Contracts and Economic Duress (CCH Australia Limited, 1985)
Johnson-Parris, Afi S., ‘Felon Disenfranchisement: The Unconscionable Social Contract Breached’ (2003) 89Virginia Law Review 109
Ong, C. A. and Susan Leung, ‘The Unconscionable Contracts Ordinance Revisited’ (2001) 9 Asia Pacific Law Review 187
Panza, Lucy, ‘The Holy Trinity: Unconscionable Contracts between Latinas and the Family, Religion, and the State’ (2010) 2 Georgetown Journal of Law & Modern Critical Race Perspectives 299
Roberts, Erica D., ‘When the Storehouse is Empty, Unconscionable Contracts Abound: Why Transplant Tourism should Not be Ignored’ (2009) 52 Howard Law Journal 747
Saunders, Helen, ‘Relief from Unconscionable Contracts: The Contracts Review Act 1980 and the ‘Unwritten Law” (2007) 29 Australian Bar Review 290
Taylor, Jennifer Rae, ‘Restoring the Bargain: Examining Post-Plea Sentence Enhancement as an Unconscionable Violation of Contract Law’ (2011) 48 California Western Law Review 129
‘Unconscionable Contracts Ordinance 1994 (Hong Kong)’ (1996) 22 Commonwealth Law Bulletin 636
Waddams, S. M., ‘Unconscionable Contracts: Competing Perspectives’ (1999) 62 Saskatchewan Law Review 1
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