The positive approach to define law rarely accommodates emotion in its consideration for the law’s being as it is. ‘Emotion’ may suffice to be a popular element for a court-room drama script, but it may not hold good ground for a judge who is typically tied to the texts of law in deciding a case. Because, as it is popularly believed, ‘law’ functions with ‘reason’ that may be flouted if emotion is interacted blindly since ‘emotion’ and ‘reason’, despite being two different streams, pose a threat of spawning ‘unjust’ outcomes when enjoined in a single stream under a judicial consideration.
Economic exchange founded on emotion between two persons who share a non-platonic relationship is feared to evident an absence of rational choice from the giving end. A decision of this sort represents a break from the idea that a sound person uses his free will to exercise what is on his mind and is subsequently bound by his act. The problem begins when the relationship becomes irreconcilable at one point of time leading to separation. Blaming each other can erode the beauty of love, eventually reducing it to a ledger of losses and gains. To determine who lost how much and who took the undue benefit, law finally gets to infiltrate love excluding the love itself and bringing ‘reason’ in motion.
Consciousness in making transactions does not play an active role as opposed to a case where decisions involve financial matters of meticulous calculation. Transactions made out of love are often devoid of rational economic choice. Being such puts an obstacle in the transaction becoming a legal one, mostly on the ground of ‘undue influence’, which emphasizes on the persisting relation between the contracting parties where one party stands in a superior platform and exercises his power over the other that influences the inferior’s decision making with regard to the offer [Royal Bank of Scotland plc v. Etridge (No 2) [2001] UKHL 41]. But this notion offers a broad canal to let all the disputed transactions flow in a single channel. The doctrine of unconscionability, however, on the other hand, simply refers to a special disability or disadvantage that leads a party to make a decision standing on that disability or disadvantage. These two words, disability, or disadvantage, do no mean the party has to be mentally ill or physically challenged as of their regular connotation. Instead, they should be understood as bearing a negative factor which is deeply rooted in emotion that makes the contracting party disable in making sound economic decision, despite not being visible or noticeable in bare inspection. Though often used interchangeably, the doctrine hailed from Australian jurisdiction has potentials to be transplanted (though with reasonable care) in other jurisdictions, especially those having their roots in the common law.
Existence of ‘special disability’, its knowledge to the other party and the fact that such party has knowingly benefitted from the transaction while failing to substantiate that the transaction was fair and reasonable are to be proved in order to establish unconscionability [Commercial Bank of Australia v. Amadio]. While the list of disabilities remains unspecified for obvious reasons in Bloomly v. Ryan, love was held to have constituted a ‘special kind of disadvantage’ in Louth v. Diprose for the first time. In that case, Mr. Diprose had developed romantic feelings, which were reciprocated in a clear manner by Mrs. Louth. This mutual affection prompted him to offer her his financial assistance. Their relation fell off and Mr. Diprose claimed his money and assets back. Upon being denied, he went to the court and drew ‘doctrine of unconscionability’ in his support. The court really found that Mr. Diprose was acting on ‘emotional dependence’ and his economic decisions that benefitted Mrs. Louth was not a sound choice that a man of ordinary prudence would have otherwise made. Contrary to the strict notion ‘no consideration, no contract’, the court was stuck in Mr. Diprose’s emotional enslavement towards Mrs. Louth.
Louth v. Diprose received its fair share of criticism for being a bit steep as for making ‘love’ as the courts’ new jurisdiction in the package of contract law. Indeed, there was concern that the case might inflict more significant damages upon the party who is already distressed due to a romantic heartbreak, rather than serving the intended purpose of justice as outlined by contract law. Following that, numerous similar cases had intentionally drawn references from Louth v. Diprose. Ultimately, the court differentiated between scenarios in which love could be considered a unique disadvantage in a contract and those in which it could not in Da Yun Xu v. Fang Lin, and MacKintosh v. Johnson respectively. Both cases highlighted ‘dependence’ and ‘financial capacity’ of parties involved in the case. If the parties involved in the case stand on the equal financial footing, the doctrine of reasonable unconscionability is redundant, because the law will not favor an imprudent bargain of a party who was deeply in love and willingly wanted to be foolish. From that sense, love cannot become a disadvantage, but it can be, only when someone takes advantage of ‘love’ that can lead to a ‘disadvantage’ in the periphery of law of contract.
Louth v. Diprose puts the saving stones for the party who genuinely sustained material loss in love (that later becomes a ‘disadvantage’) and the others ensure checks and balances between the doctrine and its possible abuses. This interplay is what enables this doctrine to remain open for future developments.
