Also known as: procedural unconscionability · substantive unconscionability · unconscionable · unconscionability · unconscionability doctrine · procedural/substantive unconscionability
Written by attorneys · grounded in primary & secondary sources — see below
A contract or term is unconscionable when it exhibits both procedural unfairness in formation and substantive unfairness in its terms. Procedural unconscionability arises from defects in the bargaining process such as lack of meaningful choice or unequal bargaining power. Substantive unconscionability arises from terms that are overly harsh or one-sided.
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Pavel Petrov agreed to sell equipment to Pinnacle Holdings under a pricing formula based on an index that both parties assumed would track actual costs. When the index diverged sharply, enforcement would impose a massive loss on Pavel. The court refused enforcement because the mistake produced an unconscionable result.
Patricia Patel and Preston Pratt signed a separation agreement that left Patricia with almost no assets after years of homemaking. Considering the parties' economic circumstances, the court found the agreement unconscionable and refused to bind itself to its terms.
Peter Park signed a premarital agreement waiving all spousal support. After a material change in circumstances left him in substantial hardship, the court refused to enforce the term because it was unconscionable at signing and enforcement would cause hardship.
Prime Logistics sold consumer goods to Pablo Perez under a contract excluding consequential damages for personal injury. The limitation was prima facie unconscionable, so the court refused to enforce it and allowed Pablo to recover full damages.
Premier Manufacturing contracted with Prism Analytics under terms that included an unconscionable penalty clause. The court refused to enforce the penalty but enforced the remainder of the contract after limiting the clause to avoid an unconscionable result.
Patrick Phan and his spouse submitted a separation agreement the court found unconscionable. The court directed the parties to submit a revised agreement or issued its own orders for property division and support.
A student must show defects in the bargaining process such as lack of meaningful choice or unequal power for the procedural element and terms that are overly harsh or one-sided for the substantive element. Both must be present for the contract or term to be held unconscionable.
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The court may refuse to enforce the agreement, request a revised version from the parties, or issue its own orders for property division, maintenance, and support.
…people," as "basic to a free society." Id., at 656. MR. JUSTICE CLARK, speaking for the Court, referred to "the freedom from unconscionable invasions of privacy" as intimately related to the freedom from convictions based upon coerced confessions. He said that both served the cause of perpetuating "principles of humanity and…
…must state facts sufficient to show (1) unjust enrichment and (2) abuse of a confidential relationship or some other form of unconscionable
…forms. ALCOA seeks reformation or modification of the price on the basis of mutual mistake of fact, unilateral mistake of fact,
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A limitation or exclusion of consequential damages is unconscionable unless it is commercially reasonable. Limitation of consequential damages for personal injury in consumer goods is prima facie unconscionable.
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Yes. The court may refuse to enforce the entire contract, enforce the remainder without the unconscionable term, or limit the application of the term to avoid an unconscionable result.
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Yes. A court may refuse to enforce a term if enforcement would result in substantial hardship for a party because of a material change in circumstances arising after the agreement was signed.
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