What consideration was given to the consideration moving from the stronger party to the weaker party?

Ontario, Canada


The following excerpt is from Canadian Kawasaki Motors Ltd. v. McKenzie, 1981 CanLII 2862 (ON SC):

Firstly, the consideration moving from the stronger party, in that instance the bank, was grossly inadequate. I have no hesitation in finding in these circumstances that the initial allocation and/or the increased line of credit gave no real prospect of viability under any circumstances let alone the untimely entrance of this ill-fated enterprise onto the commercial scene. Lord Denning's comment that the bank's action in Lloyds v. Bundy provided a "short respite from impending doom" has an uncanny application to the facts here. I stress that no undertaking re any credit, let alone appropriate credit, was ever given and the true nature of the enterprise's melancholy prospects actually suppressed by those who knew or should have known. What in fact occurred was that by the acquisition of signed exs. 7, 8, 9 and 10 the plaintiff company effectively covered its risk in tapping the market potential of the region whilst transferring the entire burden to the unknowing and unsuspecting shoulders of the defendants.

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