The evident intention behind these principles is to broaden the scope of the prohibition. In particular, the principles make clear that, in considering whether conduct is unconscionable, a court may consider the terms of the contract and is not limited to considering the circumstances relating to formation of the contract. This is a potentially significant development because courts had tended to interpret the prohibition on unconscionable conduct as applying to exploitative conduct occurring in the process of contract formation and as not applying to the terms or performance of the contract. An overly harsh or opportunistic enforcement of contract terms might now be challenged as unconscionable contrary to the ACL or the ASIC Act.
JEANNIE PATERSON teaches law at the Melbourne Law School. Jeannie canvassed these changes in DUAO, Vol 36(4) 271.