(B) THE RELATIONSHIP BETWEEN EXPLOITATION AND OTHER PRINCIPLES

The boundary between exploitation and compulsion is particularly difficult to draw, primarily because the grounds of restitution which are founded on these two principles operate in a similar way, to vitiate the claimant’s intention to benefit the defendant by virtue of the defendant’s conduct. This is because the defendant’s conduct in compelling the claimant to act or in exploiting his or her weakness deprives the claimant of the opportunity to exercise a sufficiently free choice as to whether to provide a benefit to the defendant.^[1] Despite this apparent similarity between the two principles, they are crucially different. The essential feature of compulsion is that the claimant is not able to exercise a free choice to transfer a benefit because of pressure exerted by the defendant. The essential feature of exploitation, on the other hand, is that the claimant’s lack of a free choice arises from the fact that the defendant occupied a superior position to that of the claimant, which the defendant either actually exploited or was in a position to exploit. To establish exploitation it is not necessary to show that the defendant has threatened or pressurized the claimant in any way; the ability to influence is sufficient.

There will, however, be cases where the defendant in threatening the claimant will also have exploited him or her so grounds of restitution founded both on compulsion and exploitation will be applicable. Usually, in such circumstances, it will be more appropriate for the claimant to emphasize the threats and so rely on grounds of restitution which are founded on the principle of compulsion. There will also be some cases where the defendant has exploited the claimant’s weaker position by making a misrepresentation and so induced the claimant to make a mistake.^[2] In such cases the claimant could rely on the mistake as an alternative ground of restitution. In most cases of exploitation, however, the claimant will be sufficiently aware of the circumstances such that it is not possible to conclude that he or she was mistaken, neither will the claimant lack the capacity to comprehend the nature of the transaction,^[3] leaving only the grounds of restitution founded on exploitation as relevant to establish a claim in unjust enrichment.

• [1] See PBH Birks and NY Chin, ‘On the Nature of Undue Influence’ in J Beatson and D Friedmann (eds),Good Faith and Fault in Contract Law (Oxford: Clarendon Press, 1995), 58.
• [2] See Chapter 9. Similarly, the non est factum doctrine, p 196, above, could be justified by reference to theprinciple of exploitation.
• [3] Royal Bank of Scotland pic v Etridge (No 2) [2002] 2 AC 773, 823 (Lord Hobhouse).