Cresswell v Potter [1978] 1 WLR 255

Key point

  • The modern ingredients of an unconscionable bargain was laid down: 1. the claimant is of lower income and not highly educated; 2. the sum parted with was not inconsiderable; and 3. there was no independent advice given to the claimant, especially in a complex matter

Facts

  • C was a post office telephonist
  • On her divorce from D she, entered into a contract with him by which she conveyed to him her interest in the matrimonial home in return for being released from liability under the mortgage
  • Couple of years later D sold the house at a profit
  • C sought to set aside the contract so that she would be entitled to half the profits

Held (High Court)

  • The transaction is avoided as it was an unconscionable bargain

Megarry J

In Fry v Lane, Kay J laid down three requirements for finding an unconscionable bargain:

  1. C is poor and ignorant;
  2. the sale was at a considerable undervalue; and
  3. C had no independent advice

Current case

  • C may be described as falling within the modern equivalent of poor and ignorant, as she was a ‘member of the lower income group’ and ‘less highly educated’
  • The sum parted with was not inconsiderable
  • There was no evidence of C receiving independent advice; the absence of the aid of a solicitor is striking when conveyance, a complex matter, is involved