First Principles of Business Law

3.1. Protection against unconscionable conduct

3.4. Circumstances that may give rise to a breach of s 21 of the ACL

A owns a profitable business selling flowers in a shopping mall. She leases her premises from B, the owner of the mall, at an annual rental of $30,000 . When A's lease is due for renewal, B tells her another flower-seller, C, wants to open a shop in the mall. B also says that if A wants to renew her lease, she must agree to an increased rental of $40,000 per annum: otherwise he will lease her shop space to C. A knows her business depends on her location and local goodwill. Believing B has an alternative tenant for her shop-space, A agrees to the increased rent. In fact B intends to lease a different shop in the mall to C regardless of what A agrees to. After signing her new lease, A finds out that C will be opening a competing flower shop in B's mall.  Can A's new lease be set aside on grounds of a breach by B of s 21 of the ACL?

Click here to see section 21.                         Click here to see section 22.

(a) Yes. Section 22 of the ACL lists various circumstances that a court can take into account to decide if there has been a breach of s 21. The list includes circumstances like those in the case study.

(b) No. Although s 22 of the ACL lists various circumstances that a court can take into account to decide if there has been a breach of s 21, the list does not include circumstances like those in the case study.