Unconscionability, Unconscionable Dealings and Other Forms of Equitable Fraud
Generally
Quick Take
1A claim of equitable unconscionable conduct requires specific pleading of the stronger party's actual knowledge (or wilful blindness) of the weaker party's special disadvantage; constructive knowledge or mere possibility of awareness is insufficient, and failure to plead knowledge is fatal to the claim
2A default interest rate that more than doubles the standard rate is void as a penalty where the lender can independently recover all quantifiable default-related losses (including enforcement costs, legal fees and administration costs) through a separate contractual indemnity, because the uplift is then referable only to intangible losses and increased credit risk and is out of all proportion to those interests
3Where a contract defines the default interest rate as the aggregate of the standard rate and a stated higher rate, the court will construe the clause according to its terms rather than adopt the parties' agreed but incorrect interpretation, even where both parties proceeded on the incorrect basis at trial
