Introduction：The argument that how should the notion of grossly unconscionable and take advantage of others be separately defined, which is the hot topic within the society, especially in the region of law. When the contract was grossly unconscionable at the time of its conclusion, it was subject to amendment or cancellation. Taking advantage of others is concluded in above situation. The point is what the distinction between above two situations is. In the following statement, things would become clear.
Common scenarios
Distinguishing grossly conscionable and take advantage of others could be significantly meaningful .Actually, taking advantage of others can be defined as an intentional fault, which results from personal subjective conduct. On the other hand, a contract was grossly unconscionable at the time of its conclusion, which is an objective result. The result doesn’t contain personal purpose, which imply one party’s subjective intention. So the unconscionable contract must result from some subjective factor that used by one party intentionally .For example, Mr. Chan’s factory only has one electrical wire from electrical field. The manager of electrical field always keeps in touch with Mr. Chan. One day, manager’s brother came to Mr. Chan’s factory and would like to sell hundreds unit of water-melon. Mr. Chan rejected this trade. After a few days, the manager of electrical field called Mr. Chan and said that the factory will lose power to manufacture if Mr. Chan doesn’t accept the trade. Mr. Chan has no choice but accept it [1]. Furthermore, the consequence will be entirely different. Under the situation that a contract was concluded by substantial mistake, each of the parties is entitled to petition the People’s Court or an arbitration institution for amendment or cancellation of the contract. However , under the situation that a party induced the other party to enter into a contract against its true intention by fraud or duress , or by taking advantage of the other’s hardship , only the aggrieved party is entitled to petition the People’s Court or an arbitration institution for amendment or cancellation of the contract[2] .
Further analysis
According to above , it is necessary to recognize a case whether it is grossly contract or taking advantage of others . In fact , there are significant features associated to this two theories respectively . A unconscionable contract can be concluded by fraud or duress even taking advantage of the other party’s emergence , lack of experience in trade , which result in that the aggrieved party accept the obvious unfair condition .For example , Mr. Zhang came from village and has no experience in being a worker . The supervisor knew that and concluded a contract with Mr. Zhang that the wage is much less than market value. After talking with other workers, Mr. Zhang found that it was unconscionable contract[3]. besides, one party may use personal economic position or human relationship to make the other party accept obvious weak condition. Some experts conclude that an unconscionable contract has following features:
The responsibility is not equally related to the right within the parties.
The equity between responsibility and right can be judged by the content and performance of a contract. If the content of a contract stipulates that one party have predominant or too many rights, however, the other party undertake heavy obligation, even has not basic right, then it composes the condition of unconscionable contract. Under this circumstance, the aggrieved party can be entitled to petition the People’s Court or an arbitration institution for amendment or cancellation of the contract before occurring the unfair distribution of behalf. Furthermore , the causes of inequality between rights and obligation also include that the performance generate great disparity of profit , which means that one party’s is much better than the market value or much lower than usual standard of the obligations related to the contract . Obviously, the regulation of unconscionable contract can be assessment to some actions that lead to significant inequality.
The party gain from the contract has subjective viciousness.
The party intend to use personal advantages or the other one‘s lack of experience to conclude a contract hastily. Different causes of unconscionable contract can be the distinction of features between fraud , duress , substantial mistake and taking advantages of the other .Thinking about that whether it is intentional can prevent citizens from abusing the regulation of unconscionable contract[4] .
Nevertheless, taking advantage of the other party’s hardship means that force it to sign a contract against its true attention under the circumstance that it suffer from trouble. It emphasizes the hardship, such as financial emergence or life threat. Under the unconscionable situation, it may also occur emergence. Whereas, the degree of emergence is much less than the degree of hardship that occur in taking advantage of the other party. Under the unconscionable situation, one party has relative advantage than the other one; however, the other one can has another choice rather than conclude this contract[5]. some experts claims that the features of taking advantage of the other party’s hardship can be concluded as following:
One party compels the other one to accept an unconscionable contract when it suffers from hardship or emergency.
Not only does the financial hazard include in the hardship, but also the jeopardy of life and reputation. However, the hardship was caused by the aggrieved party’s subjective intention rather than by delict. The emergency, which means that one party need financial help or service from the other one. The emergency mainly contains financial or living trouble rather than political and cultural needs. Taking advantage of the other party imply the subjective intention. On other hand, it cannot be accused of taking advantage of the other party if one party has no idea of the hardship or emergency of the other party.
The gain from aggrieved party exceeds the limit stipulated by law.
The aggrieved party was always forced to accept the contract against personal behalf. And it is impossible for guilty party to gain huge profit under usual condition. Not only does the guilty party violate the principle of equity, but also exceed the limit stipulated by law. The behalf of the parties cannot be proportional under a contract concluded by taking advantage of the other one. So it results in unconscionable contract. However, different causes result in different types of unconscionable contract.
Suffering from hardship, the aggrieved party has to accept the contract.
The aggrieved know that the contract would result in personal disadvantages; however, nothing can be changed except accepting the contract. According to above, the contract is against personal intention[6]. For example , Mr. Sun suffered from financial trouble that family was extremely sick and lack of money to pay the bill of hospital , which was the reason why Mr. Sun decided to sell a patrimonial picture . After knowing this information, Mr. Zhao contacted to Mr. and take advantage of Mr. Sun’s emergency. Finally, Mr. Zhao gains the patrimonial picture by paying 40% of its market value[7].
Conclusion
At present, there is no precise distinction between grossly unconscionable and taking advantage of the other party. Although a contract result from taking advantage of the other party can be included into unconscionable contract, they are not the same things. Actually, the outcome of taking advantage of the other party is much serious than the unconscionable contract caused by other reasons. The principle of grossly unconscionable is the application of honest principle to relationship between parties. As a clause of law, its essence can be relative precise rather than absolutely clear, which provide more freedom to judge. Under this circumstance, the judge must think about that whether it is grossly unconscionable or taking advantage of the other party throughout the respective features. Finally, it is necessary to establish equity system, which ensure that contract was concluded under the circumstance that each party is willing and equally to do this. Not only does it urge parties to perform obligation, but also provide right to aggrieved party to petition for amendment and cancellation of contract. Contract, as a mean of law, should reflect the essence of trading equality.
[1] http://www.mykh.net/bbs/viewthread.php?tid=113456
[2]http://www.gdgs.gov.cn/cyfg/htf1.htm#3
[3] http://www.lawtime.cn/info/hetong/kcxht/20090205/34204_2.html
[4] http://www.dffy.com/faxuejieti/ms/200608/20060821205057.htm
[5] http://china.findlaw.cn/info/minshang/minfa/54951_4.html
[6] http://www.lvshi100.net/news.php?NewsID=26366
[7] http://www.lvshi100.net/news.php?NewsID=26366
