UNCONSCIONABILITY
unconscionability (<<schwa>>n-kon-sh<<schwa>>-n<<schwa>>-bil-<<schwa>>-tee).1. Extreme unfairness. • Unconscionability is normally assessed by an objective standard: (1) one party’s lack of meaningful choice, and (2) contractual terms that unreasonably favor the other party. 2. The principle that a court may refuse to enforce a contract that is unfair or oppressive becauseof procedural abuses during contract formation or because of overreaching contractual terms, esp. terms that are unreasonably favorable to one party while precluding meaningful choice for the other party. • Because unconscionability depends on circumstances at the time the contract is formed, a later rise in market price is irrelevant. [Cases: Contracts 1. C.J.S. Contracts §§ 2–3, 9,
12.] “Traditionally, a bargain was said to be unconscionable in an action at law if it was ‘such as no man in his senses and not under delusion would make on the one hand, and as no honest and fair man would accept on the other;’ damages were then limited to those to which the aggrieved party was ‘equitably’ entitled. Even though a contract was fully enforceable in an action for damages, equitable remedies such as specific performance were refused where ‘the sum total of its provisions drives too hard a bargain for a court of conscience to assist.’ Modern proceduralreforms have blurred the distinction between remedies at law and in equity. For contracts for the sale of goods, Uniform Commercial Code § 2-302 states the rule of this Section without distinction between law and equity. Comment 1 to that section adds, ‘The principle is one of the prevention of oppression and unfair surprise … and not of disturbance of allocation of risks because of superior bargaining power.’ ” Restatement (Second) of Contracts § 208 cmt. b (1979) (citations omitted).procedural unconscionability.Unconscionability resulting from improprieties in contract formation (such as oral misrepresentations or disparities in bargaining position) rather than from the terms of the contract itself. [Cases: Contracts 1. C.J.S. Contracts §§ 2–3, 9, 12.]“Most cases of unconscionability involve a combination of procedural and substantive unconscionability, as it is generally agreed that if more of one is present, then less of the other is required.” E. Allan Farnsworth, Contracts § 4.28, at 312 (3d ed. 1999).
substantive unconscionability.Unconscionability resulting from actual contract terms that are unduly harsh, commercially unreasonable, and grossly unfair given the existing circumstances. [Cases: Contracts 1. C.J.S. Contracts §§ 2–3, 9, 12.]
[Blacks Law 8th]