In English law, an unconscionable bargain refers to a transaction so fundamentally unfair or oppressive due to one party’s exploitation of the other’s vulnerability that it may be set aside by the courts.
An unconscionable bargain arises when one party, taking advantage of a significantly stronger position or the other party’s weakness, enters into a contract that grossly favours them.
Courts may intervene to rescind or adjust unconscionable contracts to restore fairness and protect vulnerable parties.
Recognising unconscionable bargains protects vulnerable individuals from exploitation, promoting fairness and equity in contractual relationships.
A financially distressed garage company challenged a lease-and-leaseback arrangement with Total Oil. The Court of Appeal dismissed the appeal, holding that financial disadvantage alone did not establish an unconscionable bargain where there was no morally culpable exploitation and the plaintiffs had received independent legal advice.
A junior employee was persuaded by her employer to mortgage her flat as unlimited security for the company's overdraft of up to £270,000. The Court of Appeal set aside the mortgage, finding the bank had constructive notice of the employer's undue influence over the employee and the transaction was manifestly disadvantageous.
The defendant granted the plaintiffs an option to purchase his house for £10,000, receiving £1 consideration. He later attempted to withdraw but the plaintiffs exercised the option. The Court of Appeal upheld specific performance, confirming that nominal consideration supports a valid irrevocable option, and the resulting contract was enforceable.
September 22, 2026
National Case Law Archive
September 22, 2026
National Case Law Archive
September 22, 2026
National Case Law Archive