Also known as: unconscionability standards · unconscionability · unconscionable
Written by attorneys · grounded in primary & secondary sources — see below
A judicial standard under which a court may refuse to enforce a contract or term that is grossly unfair at the time of formation. The standard examines both procedural defects in the bargaining process and substantive imbalance in the exchange. Courts apply it to prevent oppressive results while preserving the remainder of an agreement when possible.
Una Ueda, owner of a small remediation firm, submitted a fixed-price bid of $275,000 based on an erroneous lab report. Union Eco accepted the bid without knowledge of the error. Performance would now cost over $1.1 million and force bankruptcy. The court finds enforcement would produce an unconscionable result and voids the contract.
Urban Utley and Ursula Ung negotiated a separation agreement giving Urban nearly all marital assets. Ursula had no income and would qualify for public assistance. The court reviews the economic circumstances and finds the agreement unconscionable.
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Umar Underwood and Ursula Ureña signed a premarital agreement waiving all spousal support. After ten years of marriage and two children, Ursula developed a disability that left her unable to work. The court finds enforcement of the waiver term would cause substantial hardship due to changed circumstances.
Uptown Apparel purchased a commercial embroidery machine from Unison Media under a contract excluding consequential damages. The machine malfunctioned and injured an employee. The court finds the exclusion of personal-injury damages in consumer goods prima facie unconscionable and refuses to enforce it.
Unity Capital hired Umar Usmani as an inventor and later required him to assign all future patent rights in a termination settlement. The assignment covered inventions unrelated to his employment. The court refuses to enforce the unconscionable term while preserving the remainder of the agreement.
After finding a separation agreement unconscionable, the court directs Una Ueda and Urban Utley to submit a revised agreement allocating marital property more equitably. When the parties fail to agree, the court enters its own orders for property disposition and maintenance.
The standard examines the setting, purpose, and effect of the contract or term. Gross disparity in value exchanged can support a finding of unconscionability even without a single procedural flaw, though courts often look for both elements together.
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Limitation of consequential damages for personal injury in consumer goods is prima facie unconscionable. In commercial settings the same limitation is not presumed unconscionable and requires proof of oppression or unfair surprise.
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The court may request a revised agreement from the parties or enter its own orders for property division, maintenance, and support. The original agreement is not binding on the court.
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A term that was conscionable when signed may still be refused enforcement if changed circumstances after signing would cause substantial hardship to a party.
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…any need for the State to rely, as it does, upon its own interests rather than upon the patient's. The second assumption is unconscionable. Insofar as Nancy Cruzan has an interest in being remembered for how she lived rather than how she died, the damage done to those memories by the prolongation of her death is irreversible.…