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.

Vanja Simic
If you would like further information on any of the topics mentioned in this article, please get in touch using the form on this page.
Would you like to get in touch with Vanja about this topic, or ask us any other question? Please fill out the form below to send Vanja a message!