Section 16(3) of the Contract Act, 1957: When a person who is in a position to dominate the will of another enters into a contract with him and the transaction appears, on its face or on the basis of the evidence presented, inadmissible, the burden of proving that the contract was not induced by undue influence rests with the person in a position to dominate the will of the other. Article 16(3) entered into an unreasonable bargain as part of proving undue influence. Relying on an Indian case of Poosathurai v. Kannappa Chettiar, the Privy Council observed that an agreement is considered "unconscionable" within the meaning of the definition in Article 16(3) when the lender is in a position to dominate the will of the borrower. In Ragunath Prasad v Sarju Prasad, the Privy Council raised the question whether the lender was in a position to dominate the will of the borrower. It must first be resolved before determining whether the agreement was unreasonable. In National Westminster Bank plc v Morgan, Lord Scarman referred to the Poosathurai case and said that a court could set aside an undervalued transaction as unconscionable if it was shown or could have been presumed to have been obtained by influence undue. The decision in the Poosathurai case was reaffirmed in the case of Polygram Records Sdn Bhd v The Search & Anor. Thus, inconscionability is so closely linked to undue influence that it cannot have a separate existence under Article 16(3), but is limited to procedural and evidentiary purposes. only.ConclusionThe doctrine of inconscionability and the related principle of inequality of bargaining power are evolving, but not yet completely settled in areas of contract law. Although both doctrines share similar objectives which are equitable in nature to p...... middle of paper ......ally induces the transaction through the influence given by the party. In the case of Lloyd's Bank v Bundy, Lord Denning suggested the principle of "inequality of bargaining power" whereby contractual validity requires at least some level of fairness. However, in National Westminster Bank v Morgan, Lord Scarman said that there was some confusion over Lord Denning's view that although the "fact of unequal bargaining" was a "relevant element in certain cases of undue influence,” it can never become “a proper principled basis of equitable doctrine” regarding commercial contracts. Lord Scarman warned that there is no precisely defined law setting the limits of a court's equitable jurisdiction to combat undue influence. This is the world of doctrine, not that of clear-cut rules. . . A court in the exercise of this jurisdiction is a court of conscience.