Unconscionable Bargain in UK Law

To my mind none of the essential touchstones of an unconscionable bargain are to be found in this case. The appellant was not at a serious disadvantage to the building society: neither he nor his son had any existing indebtedness towards them. His situation was not exploited by the building society. The building society did not act in a morally reprehensible manner. The transaction, although improvident, was not "overreaching and oppressive".

"Nevertheless, it seems clear that the concepts of extortion and unconscionability are very similar. 'Extortionate', like 'harsh and unconscionable', signifies not merely that the terms of the bargain are stiff, or even unreasonable, but that they are so unfair as to be oppressive. This carries with it the notion of morally reprehensible conduct on the part of the creditor in taking grossly unfair advantage of the debtor's circumstances.

The cases show that it is not sufficient that she should have received independent advice unless she has acted on that advice; if this were not so, the same influence that produced her desire to enter into the transaction would cause her to disregard any advice not to do so.

I find myself unable to accept those arguments. Mere impecuniosity has never been held a ground for equitable relief. On the contrary the defendants were reluctant to enter into the transaction. The plaintiffs took independent advice from their solicitors and accountants. They went into the transaction with their eyes open, and it was of benefit to them because they were enabled to continue trade from the site for a number of years. In my view the Judge was right to refuse equitable relief.

A substitute contract will often come into existence in a different factual context from an earlier contract and that factual context may show that the second contract is not a true substitute for the first. But if the factual situations are materially similar and, if it is a condition of the rescission or release of the original void or voidable bargain that the parties enter into a new bargain, that new bargain must be as open to attack as the old one.

Where fraud has been raised at the original trial and new evidence as to the existence of the fraud is prayed in aid to advance a case for setting aside the judgment, it seems to me that it can be argued that the court having to deal with that application should have a discretion as to whether to entertain the application.

My conclusion on the central legal issue is that the doctrine of lawful act duress does not extend to the use of lawful pressure to achieve a result to which the person exercising pressure believes in good faith it is entitled, and that is so whether or not, objectively speaking, it has reasonable grounds for that belief. The common law and equity set tight limits to setting aside otherwise valid contracts. In this way undesirable uncertainty in a commercial context is reduced.