Audio recording 19.1

Chapter nineteen focuses on unconscionable bargains, which is a very narrow doctrine of English law. So, unconscionability itself is a problematic term. Its meaning is quite slippery. It's quite difficult to say exactly what unconscionability means, which causes a degree of concern because if you can't define unconscionability then this will undermine, or contend to undermine commercial certainty. So commercial, sorry, uncomfortable bargains as a doctrine has become a bit more certain. So, it's based upon old cases about protecting the poor and the ignorant. But there is clearly a tension involved in this area where some judges and some academics, some commentators are very concerned about the substantive fairness of individual cases. And allowing a court to strike down a bargain as unconscionable which would make the contract voidable, I should say it would make the contract voidable, as would duress under influence and misrepresentation. Giving the courts quite a degree of leeway to say that there's unconscionable bargaining that should be voidable might help to ensure individual substantive, fairness. Whereas more hard line, or bright-line rules could provide greater certainty, especially for commercial parties. And so, from that point of view, maybe the focus should really be upon procedural fairness rather than substantive fairness. So, by procedural fairness, I mean, fairness in the way in which the contract was concluded. And that does seem to be the way that the courts have shifted, so that you need to now show, I think, that the defendant used some sort of oppressive conduct before a court will find that the contract is an unconscionable bargain. And by focusing on the procedure, the interference with freedom of contract, and substantive terms, the contract is minimized. Now some people, some judges and commentators have thought that unconscionability can operate as some sort of umbrella heading of a number of different topics, including the immediately preceding chapters of this book. So, misrepresentation, undue influence and duress. But I think you should be sceptical about that because it's not clear what advantage there is to bringing all these disparate things together where there's different elements of the different claims. And for example, case of undue influence and misrepresentation might be entirely innocent and not unconscionable at all. And I have a similar concern about inequality of bargaining power as some sort of broad umbrella heading, because equally that's a very vague and slippery turn. And in almost any contract there's going to be some inequality of bargaining power. And courts shouldn't really, I think, be trying to measure, or quantify the inequality of bargaining power that exists, and to say contracts are voidable on that sort of basis. I think it really does undermine commercial certainty to an unfortunate degree. But someone like Lord Denning liked it because he was a very active, or interventionists judge, but really lots of these questions, I think, could better be left to parliament to regulate. So, areas such as competition, or monopoly positions can be subject to parliamentary intervention and to statutes. And I think it's not really for judges to say that because there's been an inequality of bargaining power they won't enforce the contractual terms. It's not for the courts to rescue parties from bad bargains that they entered into.