## Facts

- Mrs. Morgan sought to save her home and entered into a transaction with National Westminster Bank plc.
- The bank required Mrs. Morgan to provide security as part of the agreement.
- Mrs. Morgan did not receive independent legal advice before entering into this transaction.
- The bank’s actions during the dealing were commercially acceptable and within standard banking practice.
- There was no evidence of the bank exerting undue influence or establishing a relationship of trust and confidence with Mrs. Morgan.
- The House of Lords reviewed previous decisions, such as Fry v Lane (1888) 40 Ch D 312, Cresswell v Potter [1978] 1 WLR 255, and Alec Lobb (Garages) Ltd v Total Oil (GB) Ltd [1985] 1 WLR 173.

## Issues

1. Whether the transaction could be set aside as an unconscionable bargain solely due to an inequality of bargaining power.
2. Whether the bank's conduct amounted to wrongful or unfair behavior sufficient to engage the doctrine of unconscionable bargains.
3. Whether the absence of independent legal advice rendered the transaction unconscionable.
4. Whether a manifest disadvantage to Mrs. Morgan was present and recognized by the bank.
5. Whether the bank had exerted undue influence over Mrs. Morgan.

## Decision

- The House of Lords held that mere inequality of bargaining power does not make a bargain unconscionable.
- The transaction could not be set aside absent wrongful or unfair conduct by the bank.
- The bank’s behavior was not found to be improper or unfair; there was no exploitation of a manifest disadvantage.
- The lack of independent legal advice for Mrs. Morgan did not in itself render the transaction unconscionable.
- The court rejected the claim of undue influence, finding no relationship of trust and confidence or improper influence by the bank.

## Legal Principles

- The doctrine of unconscionable bargains requires proof of wrongful or unfair conduct by the stronger party; mere inequality of bargaining power is insufficient.
- A manifest disadvantage, clearly apparent to the stronger party, is required to invoke the doctrine.
- The doctrines of undue influence and unconscionable bargains are distinct, the former focusing on improper influence and the latter on the exploitation of a special disadvantage.
- The presence or absence of independent legal advice is a relevant but not determinative factor in assessing unconscionability.
- The doctrine should not interfere with ordinary commercial transactions conducted in good faith.

## Conclusion

The House of Lords clarified that an unconscionable bargain requires not just inequality of bargaining power, but demonstrable wrongful or unfair conduct by the stronger party. The decision affirms the doctrine's limited scope and distinguishes it from undue influence, ensuring that equity does not unduly interfere with normal commercial dealings.


National Westminster Bank plc v Morgan [1985] AC 686 (HL)