Alec Lobb (Garages) Ltd. v Total Oil (GB) Ltd.

Alec Lobb (Garages) Ltd. v Total Oil (GB) Ltd. [1984] EWCA Civ 2 is an English contract law case relating to undue influence.

The reference to a contract only standing if it is proved to have been in point of fact fair, just and reasonable is taken from the judgment of Lord Selborne LC in Earl of Aylesbury v Morris LR 8 Ch.App 484 at 490-491.

It is none the less submitted that the logic of the development of the law leads to the conclusion that Lord Selborne's test should now be applied generally to any contract entered into between parties who did not have equal bargaining power.

In fact Lord Denning's judgment in Lloyds Bank Ltd. v. Bundy merely laid down the proposition that where there was unequal bargaining power the contract could not stand if the weaker did not have separate legal advice.

He said at pages 490-1: "The usury laws, however, proved to be an inconvenient fetter upon the liberty of commercial transactions; and the arbitrary rule of equity as to sales of reversions was an impediment to fair and reasonable, as well as to unconscionable, bargains.

Both have been abolished by the Legislature; but the abolition of the usury laws still leaves the nature of the bargain capable of being a note of fraud in the estimation of this Court; and the Act as to sales of reversions (31 Vict.

c. 4) is carefully limited to purchases "made bona fide and without fraud or unfair dealing", and leaves under-value still a material element in cases in which it is not the sole equitable ground for relief.

I agree with the judgment of Browne-Wilkinson J. in Multiservice Bookbinding Ltd v Marden [1979] Ch 84 which sets out that to establish that a term is unfair and unconscionable it is not enough to show that it is, objectively, unreasonable.

The concepts of unconscionable conduct and of the exercise by the stronger of coercive power are thus brought in, and in the present case they are negatived by the deputy Judge's findings.