Melbourne Law School - Theses
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ItemThe current position of the application of the doctrines of penalty and relief against forfeiture to security contracts( 1984)This thesis proposes to examine the position that is currently occupied by two doctrines developed by Courts of Equity, as they are applied to relief sought against the legal consequences of default by a borrower under various forms of security contracts. These are the doctrine of penalty and the doctrine of relief against forfeiture. In relation to security contracts, the need for such remedies results from a failure at two levels, firstly the failure of legislators to respond to the need for comprehensive consumer protection legislation, and secondly the failure of lawyers to evolve consistent forms of security contracts in order to fulfil genuine security needs without injustice to either party. Given the accepted views of freedom of contract, it is difficult to see any justification for the court's remaking of a contract between commercial parties all supported by expert legal advice, which should obviate the need for the protection still necessary in the case of consumers. Accepting that there is a place for such equitable relief, the remedies provided under the doctrine of penalty and, to a lesser extent relief against forfeiture, suffer in their application to security contracts from some inherent defects which render them inappropriate in many circumstances for the purpose of providing a just remedy. If, however, the concept of justice is to remain within our legal system, then such discretionary remedies should always be a part of it, but their place in the system should be that of last resort. They have no place in relieving the legislators and lawyers from their responsibilities for reform.