Reading time: 3 minutes

The average person will enter into dozens (possibly hundreds) of transactions in their lifetime. Some of us will be lucky enough to weather the transactional terrain unharmed, while others will, unfortunately, feel that we have been taken advantage of – often unconscionably so. Reading the fine print is not always enough as verbal representations, promises and assurances made during the bargaining process can, at times, entice even the wisest and savviest of consumers. Unconscionable transactions come in all shapes, sizes and guises. Accordingly, it is paramount that consumers are well aware of what amounts to an unconscionable transaction and what their rights are under the same.

The Holy Trinity of Unconscionability

For an unconscionable transaction to arise there must be:

  1. A transaction between a weaker and a stronger party;
  2. The weaker party to the transaction must be under a special disability; and
  3. The special disability must be sufficiently apparent to the stronger party, making it unconscionable for them to proceed with the bargain.

A Special Disability

When we speak of a special disability, we are not referring to a mental infirmity, although this may very well be sufficient. An unconscionable transaction may arise whenever the weaker party is affected by a characteristic that seriously affects their ability to make a judgment/decision in their own best interest. However, it is important to note that a mere inequality in bargaining power will not amount to an unconscionable transaction

Unfortunately, an exhaustive definition of what amounts to a special disability does not exist and whether a characteristic is capable of amounting to a special disability will always turn on the facts of the case. Having said that, over the years the courts have been willing to recognise the following factors as potentially giving rise to a special disability:

  1. Poverty;
  2. Sickness;
  3. Age;
  4. Infirmity of body or mind;
  5. Drunkenness; and
  6. Illiteracy

In the case of Louth v Diprose it was even held that romantic infatuation amounted to a special disability.

Independent Legal Advice

If meaningful and independent legal advice has been obtained by the weaker party prior to entering into the transaction, the bargain cannot be said to be an unconscionable one.

For legal advice to be considered meaningful it should:

  1. Be capable of allowing the weaker party to make an informed choice;
  2. Point out that there is no obligation to enter into the transaction;
  3. Point out that the individual terms of the transaction may be negotiated; and
  4. Shed light on alternative strategies and courses of action that may be explored.


Where the courts determine that a bargain amounts to an unconscionable transaction, the weaker party will be availed of their responsibilities under the deal.


Would you like to know more about unconscionable transactions or how they may affect your business practices? Our team of experienced disputes lawyers would be happy to assist you with any queries that you may have. Contact us today to see how we can help.


How Franchisors Can Avoid Misleading and Deceptive Conduct

Wednesday 18 May | 11:00 - 11:45am

Ensure your franchise is not accused of misleading and deceptive conduct. Register for our free webinar today.
Register Now

New Kid on the Blockchain: Understanding the Proposed Laws for Crypto, NFT and Blockchain Projects

Wednesday 25 May | 10:00 - 10:45am

If you operate in the crypto space, ensure you understand the Federal Government’s proposed licensing and regulation changes. Register today for our free webinar.
Register Now

How to Expand Your Business Into a Franchise

Thursday 26 May | 11:00 - 11:45am

Drive rapid growth in your business by turning it into a franchise. To learn how, join our free webinar. Register today.
Register Now

Day in Court: What Happens When Your Business Goes to Court

Thursday 2 June | 11:00 - 11:45am

If your business is going to court, then you need to understand the process. Our free webinar will explain.
Register Now

How to Manage a Construction Dispute

Thursday 9 June | 11:00 - 11:45am

Protect your construction firm from disputes. To understand how, join our free webinar.
Register Now

Startup Financing: Venture Debt 101

Thursday 23 June | 11:00 - 11:45am

Learn how venture debt can help take your startup to the next level. Register for our free webinar today.
Register Now

About LegalVision: LegalVision is a commercial law firm that provides businesses with affordable and ongoing legal assistance through our industry-first membership.

By becoming a member, you'll have an experienced legal team ready to answer your questions, draft and review your contracts, and resolve your disputes. All the legal assistance your business needs, for a low monthly fee.

Learn more about our membership

Need Legal Help? Submit an Enquiry

If you would like to get in touch with our team and learn more about how our membership can help your business, fill out the form below.

Our Awards

  • 2020 Innovation Award 2020 Excellence in Technology & Innovation Finalist – Australasian Law Awards
  • 2020 Employer of Choice Award 2020 Employer of Choice Winner – Australasian Lawyer
  • 2020 Financial Times Award 2021 Fastest Growing Law Firm - Financial Times APAC 500
  • 2020 AFR Fast 100 List - Australian Financial Review
  • 2021 Law Firm of the Year Award 2021 Law Firm of the Year - Australasian Law Awards
  • 2019 Most Innovative Firm - Australasian Lawyer