What is the test for a party to a contract where the contract is not binding and the terms of the contract are not binding?

Ontario, Canada

The following excerpt is from Loans Till Payday v. Brereton, 2010 ONSC 6610 (CanLII):

McKinlay J.A. noted in Milani v. Banks at para. 22 that the purpose of the Act is “to relieve a party to a contract from his obligations where the contract was made absent his informed consent or in circumstances of unequal bargaining power”.

In deciding whether the cost of the loan is excessive and the transaction is harsh and unconscionable, the court is required to examine the risk and circumstances of the particular case (Milani v. Banks at para. 21). The court is required to consider not only the cost of the loan but whether the transaction as a whole is harsh and unconscionable.

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