Theoretical justifications for restraining “unconscionable” demands under on-demand guarantees
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Whilst English courts have adopted "fraud" on the part of the beneficiary calling under the guarantee as the sole ground upon which the enforcement of on-demand guarantees can be restrained, the Australian courts have adopted "unconscionability" as a separate ground from that of "fraud" for restraining the enforcement of such guarantees. Drawing upon the doctrine of "freedom of contract" and principles of "cost-benefit" in economics this article provides theoretical justifications for the Australian court's divergence from the English law principles in matters restraining demands under on-demand guarantees.
Australian Business Law Review
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International Trade Law