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When Common Law Trumps Equity: The Rise of Good Faith and Reasonableness and the Demise of Unconscionability

Journal of Contract Law, Vol. 21, p. 226, 2005

Sydney Law School Research Paper No. 06/57

29 Pages Posted: 28 Nov 2006  

Elisabeth Peden

The University of Sydney Law School

Abstract

Equity is that part of law that moderates the harshness of the common law; equity is concerned with fairness, justice, and conscience. Persons aggrieved because of unconscionable transactions have therefore been able to seek assistance from equity in having the transactions set aside. However, it is only in the most abhorrent of situations that equity will do so. It therefore comes as a surprise that courts are prepared to develop the notion of 'good faith' to incorporate the standard of 'reasonableness' that takes this common law concept even beyond the scope of the equitable doctrines. This paper considers the rise of the notion of good faith meaning reasonableness, and how this sits uncomfortably with the existing equitable notion of unconscionability at common law and in legislation.

Keywords: Good Faith, Contract Law, Objective Reasonableness, Unconscionability, Implied Terms

JEL Classification: K12, K40

Suggested Citation

Peden, Elisabeth, When Common Law Trumps Equity: The Rise of Good Faith and Reasonableness and the Demise of Unconscionability. Journal of Contract Law, Vol. 21, p. 226, 2005; Sydney Law School Research Paper No. 06/57. Available at SSRN: https://ssrn.com/abstract=947361

Elisabeth Peden (Contact Author)

The University of Sydney Law School ( email )

New Law Building, F10
The University of Sydney
Sydney, NSW 2006
Australia

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