Case Summary

Blomley v Ryan (1956) 99 CLR 362

Contract; vitiating circumstances; unconscionable dealing.

Facts: Ryan, a 78-year-old man, owned a valuable farming property. Ryan had indicated on various occasions that he did not wish to sell his farm. He was a humble man of little education who was well known to indulge in heavy drinking sprees. On one of these occasions, when it was obvious that Ryan was drunk, Blomley and two other persons got Ryan to agree to sell his property to Blomley.

Issue: Could the sale be made void on grounds of unconscionable dealing?

Decision: The sale should be set aside as void.

Reason: Because of his drunkenness, Ryan was obviously not in a position to protect his own interests during the negotiations or when the contract was concluded, and the other parties were aware of this. They took unconscionable advantage of Ryan's obvious weakness to obtain his consent to the transaction. The court noted different circumstances which may place the weaker party at a serious disadvantage and justify setting aside a transaction for unconscionable dealing: poverty, or need of any kind; sickness; age; sex; infirmity of body or mind; drunkenness; illiteracy or lack of education; lack of assistance or explanation where this is necessary; ignorance, inexperience; and financial need.