Is unconscionability a criterion for deciding whether to relieve against penalties for forfeitures?

Alberta, Canada


The following excerpt is from World Land Ltd. v. Daon Development Corporation, 1981 CanLII 1140 (AB QB):

The principle of unconscionability, as a criterion for deciding whether to exercise the power to relieve against penalties for forfeitures, was clearly adopted by McDermid J.A. in the Popyk case, supra. He said, at p. 692: Somervell L.J., in Stockloser v. Johnson [supra] stated at p. 634: “I am clear that the plaintiff could only recover if he could satisfy the court that it was unconscionable in the defendant to retain the money”. With the greatest of deference I agree with that statement. Why should a court interfere with the terms of a contract unless the plaintiff can demonstrate that it would be unconscionable for the defendant to retain the moneys as provided for by the terms of the contract. Before a court is justified in interfering it is not sufficient for a plaintiff to show that the contract was improvident; he must show the forfeiture was unconscionable.

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