Unconscionability, embracing both procedural and substantive unconscionability, is a multi-dimensional legal concept. It evolved at common law, where traditional doctrines such as fraud, duress and mistake did not cover every situation in which a contract might be oppressive. Thus, the concept of unconscionability was developed to achieve justice in cases of unconscionable dealing, inequality in bargaining power and special disadvantage. However, application of this doctrine differs substantially even in the common law jurisdictions. Moreover, in the civil law jurisdictions, while a comprehensive concept of unconscionability may not exist, there are a number of legal doctrines and instruments that ensure fairness in contract law and, inter alia, in financial transactions; they all define unconscionability largo sensu.

The harmonised regulation of unconscionability in financial transactions would provide both parties with greater legal certainty since the validity of the contract or its terms would not depend on the peculiarities of the applicable national law. The regulation of unconscionability is closely linked to the free movement of capital and consumer protection and, therefore, it is especially important in the EU.

In this chapter, taking Lithuania as an example, I will investigate some issues relating to the harmonisation of the legal rules that deal with unconscionability largo sensu in financial transactions and attempt to evaluate the pros and cons of such harmonisation. I will demonstrate that Lithuania has transplanted the major rules on unconscionability from the UNIDROIT Principles of International Commercial Contracts (1994) and the Principles of European Contract Law.