loss which the innocent party will incur by reason of the breach. One exception to this general rule is the provision for the payment of a deposit by the
purchaser on a contract for the sale of land. Ancient law has established that
the forfeiture of such a deposit (customarily 10 per cent of the contract price)
does not fall within the general rule and can be validly forfeited even though
the amount of the deposit bears no reference to the anticipated loss to the
vendor flowing from the breach of contract.
(Emphasis in Tang)
 Justice Newbury cited one case in which a deposit at
20 per cent was found to be reasonable, but added, at para. 27,
the amount of the deposit must not be excessive. I agree, but
I would be reluctant to specify a numerical percentage, since
much turns on the context. I note, however, that in this case the
deposit was slightly more than seven per cent. There is no evidence that this was a commercially unreasonable deposit.
 Where, as here, there is no gross disproportionality in the
size of the deposit, the court must consider other indicia of
unconscionability. This is an analysis the application judge did
not undertake. By failing to do so, the he erred in law.
 The list of the indicia of unconscionability is never closed,
especially since they are context-specific. But the cases suggest
several useful factors such as inequality of bargaining power,
a substantially unfair bargain, the relative sophistication of the
parties, the existence of bona fide negotiations, the nature of the
relationship between the parties, the gravity of the breach and
the conduct of the parties.
 Consideration of these indicia show there was no unconscionability in this case.
 This was a straightforward commercial real estate transaction undertaken in the expectation of profit by both sides, who
were previously strangers. There was no inequality of bargaining power between them. There was no fiduciary relationship.
Both parties were sophisticated.
 The effect of fixing a price for the property created some
risk for both parties because of the possibility of fluctuation in the
market value of the property over a long closing period. The initial
deposit demonstrated the buyer’s commitment to the property.
That commitment was increased when the buyer waived the
conditions inserted in the agreement of purchase and sale for its
benefit, requiring it to increase the amount of the deposit.
 Later, when it appeared that the buyer needed an extension of the closing date, it sought that extension offering an
additional $200,000 deposit, demonstrating it knew the seller
would be concerned about the buyer’s ability to close the transaction and would seek to hedge against that risk. Further, by
extending the closing date, the seller would lose any opportunity