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When entering into a legal transaction with another person, each party can best protect their own interests if they enjoy equal bargaining power. If, for some obvious reason, the bargaining power of one party is weak and this is obvious to the stronger party, the stronger party can take advantage of this to strike a hard bargain.
Of course, in the real world there is never any exact equality of bargaining power and for practical reasons, a degree of inequality must be tolerated. However, conduct that is contrary to good conscience is not tolerated. Broadly speaking, unconscionable conduct arises when the inequality between contracting parties is serious and obvious, and the stronger party takes advantage of this to an extent that good conscience should not allow.
In such circumstances, the transaction is voidable and the weaker party can have it set aside as void, on grounds of unconscionable dealing. Following such an order, the parties can ask to be restored to the position they were in prior to the transaction (restitutio in integrum).
The rules of unconscionable dealing explained in this module are found in the general law (common law and equity).
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