Mackay v Campbell, 1967 SC (HL) 53
Citation:Mackay v Campbell, 1967 SC (HL) 53
Rule of thumb:Can old or weak people be induced into contracts with grandiose & opportunistic sales pitches? No. Where one party induces a weak person to enter a contract which is significantly against their financial interests through giving them elaborate opinions, which falls short of both being misrepresentations or an off-the-spectrum bad deal, and which there is no close relationship to constitute undue influence either, this contract can still be reduced based upon facility and circumvention – the law has a safeguard against weak people entering contracts significantly to their financial detriment based upon charm and flowery language by another party as this is deemed to be unfair exploitation. Again, this fits in with the theme in UK contract of weak people not being able to be grossly exploited under it – vulnerable people have protection in UK contract law – UK contract law may not always protect fully competent people from entering bad deals, but it does protect the vulnerable from very bad deals in the marketplace as the Judges hate to see that and the UK Courts will not be used to enforce it.
Background facts:
The facts of this case were that this was commercial matter involving the sale of land. MacKay entered into a contract to sell an island in this case which he later regretted, and he believed that he had been taken advantage of, particularly due to being somewhat unwell. MacKay wished to renege on this but the other party refused.
Parties argued
Mackay argued that he had been subject to facility and circumvention in this matter and sought to reduce it - he led evidence of how he was in a bad state of mind mentally, the trasaction was well below market value, and he provided examples of the grossly exaggerated sales pitch he was subjected to. Campbell argued in response that MacKay was on the whole compos mentos and capable, the sales pitch was not overly distasteful, albeit there were many opinions laden with superlatives and metaphors, Mackay had obtained a benefit - albeit not at the best price he could have hoped for, and that in the full circumstances of the case the test for facility and circumvention was not met.
Judgment:
The Court upheld the arguments of Campbell. The Court considered the facts of this matter closely and the Judge considering the weight of the arguments in the 3 components did not think that they combined to fit the test of facility and circumvention. The Court affirmed that this was an equitable doctrine where past authority was not overly helpful, with the unique facts of the scenario at hand having to be taken on their own merits with the final decision of whether facility and circumvention was met largely at the discretion of the Judge, and in this case the arguments of the pursuer plaintiff just fell short.
This was nonetheless a landmark case that demonstrated the potential of the facility and circumvention principle. Where there is a transaction where someone vulnerable has been taken advantage of, this principle allows this contract to be reduced, however, this case does also show that there is a high threshold for this principle to be met and it will only be able to be used in fairly exceptional circumstances where a vulnerable person has been badly taken advantage of.
Ratio-decidendi:
'three matters have to be considered: (1) weakness and facility, (2) circumvention, and (3) lesion. These three factors are all interrelated and they must be looked at as a whole and not in separate compartments. The strength of averments on one matter may compensate for the weakness of averments upon other matters’, Lord Guest at 9
'(1) weakness and facility, (2) circumvention, and (3) lesion. These 3 factors are all interrelated and they must be looked at as a whole and not in separate compartment ... one ... may compensate for the weakness of ... other', Lord Guest
Warning: This is not professional legal advice. This is not professional legal education advice. Please obtain professional guidance before embarking on any legal course of action. This is just an interpretation of a Judgment by persons of legal insight & varying levels of legal specialism, experience & expertise. Please read the Judgment yourself and form your own interpretation of it with professional assistance.