(iv) Unconscionability

In Countrywide Communications Ltd v ICL Pathway Ltd²⁴¹ the claimant had provided public relations and communication services in respect of a bid by the defendant to introduce a card system for the provision of benefits by the Post Office. There was no binding agreement, either express or implied, to appoint the claimant to provide these services, but the claimant anticipated that, if it assisted with the bid, it would get the formal contract if the bid was successful. It was accepted that the work done by the claimant was for the benefit of the defendant. The defendant’s bid was successful but the claimant’s services were eventually dispensed with and no contract was made. The claimant brought a claim for quantum meruit²⁴² in respect of the work which it had done. The trial judge considered a wide range of cases on anticipated contracts and found it impossible to formulate a general principle which governs all the different situations. He emphasized that much of the problem was caused by trying to categorize these claims as involving unjust enrichment when the real issue was whether the claimant should be compensated for a loss which was unfairly sustained. Consequently, he preferred to analyse the claim in respect of anticipated contracts as being founded on justice and unconscionability. In determining whether there was an obligation to pay for the benefits provided, the judge identified a number of relevant factors.^[1] These included: whether the benefit would normally be provided free of charge; whether the claimant bore the risk of no contract being made; whether the defendant had obtained a real benefit; whether the defendant was at fault in preventing the contract from being made. The judge particularly emphasized the significance of the defendant being enriched and recognized the relevance of the claim being analysed as restitutionary. The application of these principles led the judge to conclude that the claimant should be recompensed for the work it had done. It was particularly significant that the defendant had been benefited and had assured the claimant that a contract would be made if the bid succeeded.

This analysis is a real cause for concern. The uncertainty of founding the claim on the justice of the case and unconscionability is unacceptable, despite the attempt of the judge to identify some factors which could assist the court in determining this. The real irony of the decision is that the claim could easily have been analysed as a claim founded in unjust enrichment. The defendant had been benefited by services provided by the claimant. The claimant expected to be paid for the work under a contract. That contract was not forthcoming and so the basis had totally failed. Whilst the claimant had taken a risk that the contract might not be made if the bid was not successful, it was not considered to have taken the risk that a contract would not be made if the bid was successful. Analysing liability with reference to an apparent cause of action founded on unconscionability can only serve to confuse; the underlying cause of action should instead have been treated as one involving the defendant’s enrichment at the claimant’s expense grounded on total failure of basis.

• [1] These were commended by Clarke J in MSM Consulting Ltd v United Republic of Tanzania [2009]EWHC 121 (QB), [171]. See also Benourad v Compass Group plc [2010] EWHC 1882 (QB), [106] (Beatson J).