Good Deal or Unconscionable Bargain?

Everyone loves a good deal! The shrewd operators among us are able to readily identify and seize opportunities to enter into bargains which are very advantageous, but at times may also be viewed as inequitable. Let us briefly examine some of the possible legal implications of these agreements and the impact on those party to them.

An unconscionable bargain is one which is so oppressive and slanted that it is expected that no rational or informed person would agree to its terms. It oftentimes presents in situations where there is unequal bargaining power between the parties and where undue influence is found to be exerted. This usually results in contractual terms which are obviously unjust and inequitable. In this jurisdiction, we have adopted the equitable principle of unconscionable bargain and it now stands as a cause of action which can be relied on by eligible parties, to invalidate an inequitable contract. 

For the Courts to find that a contract was unconscionable it must be established that:

  1. one party was at a serious disadvantage to the other by reason of poverty, ignorance, lack of advice or otherwise, so that circumstances existed of which unfair advantage could be taken;
  2. this weakness was exploited by the other in a morally culpable manner;
  3. the transaction was not merely hard but oppressive.

The case of Boustany v Pigott (1993) 42 WIR 175 is a well-known example of how the Courts have treated unconscionable bargains. In that case, the offending party through elaborate arrangements, special treatment, and flattery of an elderly woman, convinced her to sign a lease which contained terms which very unfavourable to her. At the time, she was not in charge of conducting her own business affairs and the other party was well aware of that fact. She did not have the benefit of legal representation at the time of making the decisions and the circumstances were curated in such a way to ensure that she could not consult with family or any professional representative.  The evidence presented to the Court was that she was not aware of what she was doing whereas the other party was an astute businesswoman on whom reliance was placed for guidance. The Judge found that the lease was unreasonable, null and void, and ordered that it be rescinded. 

The importance of legal representation cannot be overstated in relation to parties who are finalising important agreements. It is beneficial in that it should assist in protecting your legal interests by ensuring that the terms are favourable and that there are no unintended ramifications. Where the other contracting party receives independent legal advice, it will significantly reduce the likelihood that they will be able to successfully claim at a later time that the agreement was unconscionable or that it was entered into through undue influence. 

This increases the certainty of the contract and ensures that either party can avail themselves of the options available for its enforcement. This is a necessity, particularly for contracts involving large sums of money, property, or generally for commercial purposes. It also behoves contracting parties to strive for fairness in their contractual dealings and to avoid unconscionable and oppressive terms which may be counter-productive by adversely affecting an agreement’s validity. 

If you believe you have entered into an unconscionable bargain, you should seek out a legal professional who can advise on your rights and options.

Daniel Gyles is an associate at Myers, Fletcher & Gordon and is a member of the firm’s litigation department. Daniel may be contacted via or through the firm’s website This article is for general information purposes only and does not constitute legal advice.

This article is for general information purposes only and does not constitute legal advice.

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