The District of Columbia Court of Appeals returned the case to the lower court for trial to determine further facts, but held that the contract could be considered unconscionable and negated if it was procured due to a gross inequality of bargaining power.
In the United States, the concept as applied to sales of goods is codified in Section 2-302 of the Uniform Commercial Code.
For the defense of unconscionability to apply, the contract has to have been unconscionable at the time it was made; later circumstances that make the contract extremely one-sided are irrelevant.
There are generally no standardized criteria for determining unconscionability; it is a subjective judgment by the judge, not a jury, and is applied only when it would be an affront to the integrity of the judicial system to enforce such a contract.
The question was whether the contract leading to the repossession of Bundy's farmhouse was voidable due to pressure brought by the bank.
The Morgans got into arrears on the loan, and National Westminster Bank, commonly known as "Nat West", offered a rescue package to help the couple save their home, where they would pay off the existing mortgages and give the couple a bridge loan for the purposes of aiding the husband's business.Furthermore, since Bundy relied upon Lloyd's for the mortgage and his son's line of credit, the bank-customer relationship was found to have created a fiduciary duty; hence, the bank should have recommended that he seek independent legal advice.Lord Denning MR found that the contract was voidable owing to the unequal bargaining position in which Bundy had found himself, in that he had entered into the contract without independent advice and that unfair pressures were exerted by the bank.Understand the vitiating factors to a contract: Factors that invalidate/vitiate a contract: misrepresentation; other vitiating factors in outline only – mistake, duress, undue influence; relevant case law.Unconscionability (sometimes known as unconscionable dealing/conduct in Australia) is a doctrine in contract law that describes terms that are so extremely unjust, or overwhelmingly one-sided in favor of the party who has the superior bargaining power, that they are contrary to good conscience.