'It's Just Business' ... Or Is It? When an Efficient Breach of Contract Becomes Unconscionable Conduct under the Australian Consumer Law

In business it is sometimes more economically viable for a party to intentionally breach their contract with the other party and pay damages than it is to proceed with the agreement. The theory of efficient breach justifies this behaviour on the basis that the innocent party is adequately compensated and the party in breach is ‘better off’ as a consequence of abandoning the contract. There is limited judicial authority suggesting that such a breach may violate the statutory prohibitions against unconscionable conduct in trade or commerce contained in the Australian Consumer Law. The point at which it may do so remains unclear. This article critically considers the relationship between the common law of contract and the Australian Consumer Law in this context and examines the relevant case law to identify when an efficient breach of contract may amount to statutory unconscionability.