Abstract
RECENT decisions relating to commercial transactions have raised issues about the limits of the courts’ jurisdiction to interfere with contractual terms, even where the terms seem to yield unjust results on breach. The author argues for a reconceptualisation of the ancient equitable doctrine of relief against forfeiture, as one which ensures that rights taken by way of security should never allow a secured creditor to recover more than his secured debt. Building on roots in the law of mortgages, this requires the court to characterise the substance of the parties’ bargain. It can, in common with the law of penalties, be understood as implementing a mandatory policy which allows the parties full freedom in crafting their primary obligations, but denies them full freedom in deciding what shall be the consequences of a breach of a primary obligation. The author argues that the restatement fits the contours of the existing law, and the requirements of corrective justice.
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