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Contracts - Do they have to be Fair?

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                      CONTRACTS

UNFAIR? 

UNCONSCIONABLE? 

UNDUE INFLUENCE? 

DURESS?

This topic deals with the rare cases when a Court can decide whether a contract should be declared unenforceable because its terms are unfair. 

We will examine the the circumstances when a Court might declare that a contract is invalid because of duress or because one party was subject to an undue influence.

We will also examine the legal concept of the unconscionable bargain.

NO GENERAL RULE

There is certainly no rule of law that a contract has to be fair. 

Our Courts have no general power, except in clearly exceptional cases, to hold that a contract should not be enforceable because it is unfair as between the parties to that contract.

However, because the essence of a true agreement is consent then it is only logical that any agreement or consent contained by a threat or by clear undue persuasion is not in fact a true agreement or a true consent. 

Over quite a long time our Courts have developed legal principles known as duress and undue influence and have more recently developed a concept of an unconscionable bargain.   These three principles are examined in basic terms below.

Duress

Undue Influence

Unconscionable Bargain

If you think that your contract has been affected by one of the above principles then you should obtain some further advice and and try and get your hands on a copy of the comprehensive textbook on The Law of Contract in New Zealand written by Burrows Todd and Finn.    It's well worth a read.

DURESS

There are many kinds of fact situations which could constitute duress. &

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I have been unable to acquire any case law in regards to bankruptcy. I am thge alleged defendant in the matter and have opposed the application for bankruptcy as I am not the defendant. The case is now at the stage of the high court requiring a synopsis under 251a, I wish to make submissions in not being notified of the hearing at the district court after the notice of proceeding was served. The matter then got judgement without my knowledge and is now before the high court for bankruptcy. Please advise the procedure to locate any supportive case law that may assist with my application to set aside the bankrupcy claim.

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A.Marsh
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What position does that leave me if I want to legal challenge this. Without causing me excessive expresses.

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Netlaw responds: If you say that they cannot properly sue because there was a new agreement for time payment, then you can apply for an injunction saying that the Statutory Demand Notice is wrong. But it will cost you. An injunction should not be done without legal advice. Type up a Statement setting out precisiely all the facts as you know them and see a lawyer as soon as possible. A letter shouid be sent to the other side saying how inappropriate the Demand procedure is when the subsequent agreement between the parties was made and kept by you. But you must get your facts right!"

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