P leased a property to D, whose affairs were managed by her brother, X, since she was “quite slow”. When X was away, P got a lawyer to draw up a new lease at a much higher rent and although the lawyer warned D that it would not be in her interest to sign, she insisted on doing so. D wanted to set aside the new lease as an unconscionable bargain and PC allowed this.
Lord Templeman: There are several points regarding when and how equitable fraud can vitiate a contract: (1) For equity to be invoked the agreement must be unconscionable in that “one of the parties to it has imposed the objectionable terms in a morally reprehensible manner”; (2) “Unconscionable” relates to to the terms of the bargain AND to the moral culpability of the stronger party; (3) There has to be both unequal bargaining power and an abuse of that power; (4) There has to actually be unconscionable conduct and it isn’t enough that the terms are unfair or imbalanced; (5) The burden is on the party seeking relief to show unconscionable conduct, “namely that unconscientious advantage has been taken of his disabling condition or circumstances”. Mckendrick: It is odd that the bargain was set aside despite P getting good legal advice not to sign from the lawyer.
