My Law Tutor

Lloyds Bank v Bundy – 1975

April 01, 2024
Micheal James

Jurisdiction / Tag(s): UK Law

Introduction to Lloyds Bank v Bundy – 1975

Lloyds Bank v Bundy [1975] QB 326 stands as a landmark case in English contract law. It delves into the complexities of undue influence, unconscionable bargains, and the legal system’s role in protecting vulnerable individuals entering into contracts. This case study explores the circumstances surrounding the dispute, the legal question it raised, and its lasting impact on safeguarding vulnerable parties in contractual settings.


The case centered on a loan agreement gone awry. Here’s a breakdown of the situation:

  • Herbert Bundy, an elderly farmer with a limited financial understanding, approached Lloyds Bank (plaintiff) seeking a loan to support his son’s struggling business. Mr. Bundy already had an existing overdraft on his account, highlighting his precarious financial situation.
  • The bank, aware of Mr. Bundy’s vulnerability, saw an opportunity. They pressured him to sign a guarantee for a substantial sum beyond the loan amount. Additionally, they demanded a charge on his farm (Yew Tree Farm) as security for the loan.


This seemingly straightforward loan agreement turned into a legal battle. The central question in Lloyds Bank v Bundy revolved around the enforceability of the contract:

  • Was the contract signed by Mr. Bundy legally binding, or could it be voided due to undue influence exerted by the bank, considering Mr. Bundy’s vulnerability and the potentially unfair nature of the agreement?

This case presented a crucial issue – balancing the freedom of contract with the protection of vulnerable individuals from exploitation in financial transactions.


In a landmark decision, the Court of Appeal ruled in favor of Mr. Bundy. They deemed the contract voidable due to undue influence exerted by the bank.


The court’s decision hinged on two key factors:

  • Undue Influence: The court established that the bank, aware of Mr. Bundy’s age, limited financial knowledge, and dependence on his son’s business, exerted undue pressure. They pressured him to sign the complex loan agreement and farm charge without seeking independent legal advice. This pressure tactic, considering Mr. Bundy’s vulnerability, constituted undue influence in the eyes of the court.
  • Fiduciary Duty: The court explored the concept of a fiduciary duty, a legal obligation requiring utmost good faith and fair dealing. While not explicitly established in this case, the court considered the significant disparity in bargaining power between the bank and Mr. Bundy. The bank, with its superior knowledge and resources, arguably had a moral and ethical responsibility to ensure Mr. Bundy fully understood the implications of the agreement.


Lloyds Bank v Bundy remains a leading case concerning undue influence and safeguarding vulnerable parties in contracts. It highlights the following:

  • Protection from Exploitation: The case emphasizes the court’s willingness to intervene and protect individuals from exploitation in contracts where a significant imbalance of power and potential undue influence exist. The case sets a precedent for challenging contracts where pressure and a lack of understanding create unfair burdens.
  • Importance of Independent Advice: The case underscores the importance of seeking independent legal advice, especially for complex financial agreements and for individuals in potentially vulnerable situations. Mr. Bundy’s lack of independent legal counsel played a significant role in the court’s decision.


Lloyds Bank v Bundy remains a significant case in contract law. It clarifies the concept of undue influence and the court’s role in protecting vulnerable parties from unfair contractual burdens. The case underscores the importance of fair dealing, transparency, and the right to seek independent advice in financial transactions. It also highlights the ongoing debate about balancing freedom of contract with the need for safeguards against exploitation in a complex commercial environment.

Why Choose Us:

Our literature review service provides students with expert assistance in conducting comprehensive literature reviews for their dissertation projects. With a focus on identifying relevant sources, synthesizing key findings, and critically analyzing existing scholarship, we help students develop robust literature reviews that form the foundation of their research.

Cite This Work

Select a referencing style to export a reference for this article:

All Answers ltd, 'Lloyds Bank v Bundy – 1975' (, ) <> accessed 24 July 2024
My, Law, Tutor. ( ). Lloyds Bank v Bundy – 1975. Retrieved from
"Lloyds Bank v Bundy – 1975." . All Answers Ltd. 07 2024 <>.
"Lloyds Bank v Bundy – 1975." MyLawTutor., . Web. 24 July 2024. <>.
MyLawTutor. . Lloyds Bank v Bundy – 1975. [online]. Available from: [Accessed 24 July 2024].
MyLawTutor. Lloyds Bank v Bundy – 1975 [Internet]. . [Accessed 24 July 2024]; Available from:
<ref>{{cite web|last=Tutor |first=MyLaw |url= |title=Lloyds Bank v Bundy – 1975 | |date= |accessdate=24 July 2024 |location=UK, USA}}</ref>

Related Cases

Southwark LBC v Mills

UK Law . Last modified: March 26, 2024

Introduction to Southwark LBC v Mills: Southwark LBC v Mills is a notable case in landlord-tenant law that delves into the intricate dynamics of the relationship between landlords and tenants. This case study provides a comprehensive analysis of the legal complexities involved, shedding light on its background, legal issues, court proceedings, judgment, and its significance […]

White and Others v Chief Constable of South Yorkshire

UK Law . Last modified: January 17, 2024

Introduction to White and Others v Chief Constable of South Yorkshire The legal case of White and Others v Chief Constable of South Yorkshire is of paramount importance, and delving into its complexities is essential. This case gained prominence due to its significant impact on legal discussions and its role in shaping relevant laws. To […]

Pinnel’s Case – 1602

UK Law . Last modified: January 5, 2024

Introduction to the Legal Case Summary The Legal Case Summary serves as a distilled version of a specific legal case, designed to provide a comprehensive yet condensed overview. It aims to present the case’s essential components, including pivotal events, core legal issues, and significant outcomes, all in a simplified manner. This summary acts as a […]

With v O’Flanagan – 1936

UK Law . Last modified: March 5, 2024

Introduction to With v O’Flanagan – 1936 With v O’Flanagan (1936) is a landmark English contract law case concerning misrepresentation. It established the principle that a party making a representation during contract negotiations has a duty to disclose material changes in circumstances before the contract is finalized, even if the initial representation was true at […]

Photo Production v Securicor – 1980

UK Law . Last modified: March 18, 2024

Introduction to Photo Production v Securicor: Photo Production v Securicor – 1980 stands as a seminal case in contract law, highlighting the intricate nuances of contractual agreements and the obligations they entail. This case, which unfolded within a specific jurisdiction, involved Photo Production as the plaintiff and Securicor as the defendant. Background: The genesis of […]

Barrett v Ministry of Defence

UK Law . Last modified: July 20, 2024

Introduction to Barrett v Ministry of Defence: Barrett v Ministry of Defence is a notable case that exemplifies the application of tort law principles, particularly negligence, in cases involving government entities. This case holds significance in legal jurisprudence for its examination of duty of care owed by governmental organizations to individuals affected by their actions. […]

go to top