Unconscionable

Comprehending laws and contracts is impossible, unless we first learn the meaning of the words and phrases they contain.

Moderator: notmartha

Post Reply
User avatar
notmartha
Posts: 745
Joined: Mon Jul 22, 2013 1:16 pm

Unconscionable

Post by notmartha » Wed Mar 02, 2016 1:13 pm

UNCONSCIONABLE

KJV References

None

Selected Writings of Sir Edward Coke, vol. I, Sir Edward Coke, 1600
So here, in our case, there ought to be an equal distribution secundum quantitatem debitorum suorum; but if, after the debtor becomes a bankrupt, he may prefer one (who peradventure hath least need), and defeat and defraud many other poor men of their true debts, it would be unequal and unconscionable, and a great defect in the law, if, after that he hath utterly discredited himself by becoming a bankrupt, the law should credit him to make distribution of his goods to whom he pleased, being a bankrupt man, and of no credit; but the law, as hath been said before, hath appointed certain commissioners, of indifferency and credit, to make the distribution of his goods to every one of his creditors, rate and rate alike, a portion, according to the quantity of their debts, as the statute speaketh.
The Complete Book of Everyday Christianity, Robert Banks and R. Paul Stevens, 1997
Another common theme, especially in the Old Testament, is justice. The Christian should not use contracts for unjust gain or to take advantage of those who are disadvantaged or disempowered. The law allows the courts to strike down contracts that are considered to be “unconscionable.” How much higher, then, the standard for Christians who, in following Christ, are to act and live out of love in all dealings and relationships.
Webster’s Dictionary of the English Language, 1828
UNCON'SCIONABLE, adjective
1. Unreasonable; exceeding the limits of any reasonable claim or expectation; as an unconscionable request or demand.
2. Forming unreasonable expectations. You cannot be so unconscionable as to expect this sacrifice on my part.
3. Enormous; vast; as unconscionable size or strides. [Not elegant.]
4. Not guided or influenced by conscience.
Bouvier’s Law Dictionary, 1856
UNCONSCIONABLE BARGAIN, contracts.
A contract which no man in his senses, not under delusion, would make, on the one hand, and which no fair and honest man would accept, on the other. 4 Bouv. Inst. n. 3848.
The Century Dictionary, an Encyclopedic Lexicon of the English Language, 1895
unconscionable century.JPG
unconscionable century.JPG (128.09 KiB) Viewed 3508 times
UCC§ 2-302. Unconscionable contract or Clause.
(1) If the court as a matter of law finds the contractor any clause of the contract to have been unconscionable at the time it was made the court may refuse to enforce the contract, or it may enforce the remainder of the contract without the unconscionable clause, or it may so limit the application of any unconscionable clause as to avoid any unconscionable result.
(2) When it is claimed or appears to the court that the contractor any clause thereof may be unconscionable the parties shall be afforded a reasonable opportunity to present evidence as to its commercial setting, purpose and effect to aid the court in making the determination.
WEX Legal Dictionary
Unconscionability
A defense against the enforcement of a contract or portion of a contract. If a contract is unfair or oppressive to one party in a way that suggests abuses during its formation, a court may find it unconscionable and refuse to enforce it. A contract is most likely to be found unconscionable if both unfair bargaining and unfair substantive terms are shown. An absence of meaningful choice by the disadvantaged party is often used to prove unfair bargaining.
Nolo’s Plain-English Law Dictionary
Unconscionable
When one party to a contract takes advantage of the other due to unequal bargaining positions, perhaps because of the disadvantaged party's recent trauma, physical infirmity, ignorance, inability to read, or inability to understand the language. A contract will be terminated as unconscionable if the unfairness is so severe that it is shocking to the average person.
From Legal Match:
What Is an Unconscionable Contract?

An unconscionable contract is one that is so one-sided that it is unfair to one party and therefore unenforceable under law. It is a type of contract that leaves one party with no real, meaningful choice, usually due to major differences in bargaining power between the parties.

In a lawsuit, if the court finds a contract to be unconscionable, they will typically declare the contract to be void. No damages award or specific performance will be issued, but instead the parties will be released from their contract obligations.

What Makes a Contract Unconscionable?

A contract may be found to be unconscionable based on three different factors:
• Undue Influence: This is where one party exercises unreasonable pressure in order to get the other party to sign the contract (especially where one party takes advantage of the other in some way)
• Duress: This where one party uses threats in order to get the other to agree to the contract terms. This can take the form of physical threats, or other types of threats (such as not releasing goods in the proper way until the other party signs)
• Unequal Bargaining Power: This occurs where one party has an unreasonable advantage of the other. This is usually proved if one party is aware that the other obviously did not understand the contract terms
• Unfair Surprise: When the party who creates the contract includes a term in the contract without the other parties knowledge and is not within the other parties expectations
• Limiting Warranty: A contract would be unconscionable if one party tries ti limit their liability to a breach of contract or to any damages that he may incur on other party

The basic characteristic of most unconscionable contracts is that one party signed the contract under situations involving pressure, lack of information, or by being misled.

What Is an Unconscionable Contract Example?

A typical example of an unconscionable contract is where one party is an experienced dealer in a type of business, while the other party is an average consumer.

Suppose that the business dealer requires the consumer to sign a contract. Within the contract, they have buried very complicated, technical language that most people wouldn’t understand or recognize. The business dealer used very small font and inserted the clause in a way that would purposefully mislead the consumer into signing on unfair terms.
In this case, the contract might be declared unconscionable due to the unequal bargaining power between the parties, and the fact that one party used their knowledge and experience to take advantage of the other. If the court finds the contract unconscionable, it will be declared void and unenforceable.

What Is an Unconscionable Contract Compared to an Illegal Contract?

An unconscionable contract is not the same as an illegal contract. An illegal contract is one that is against the law because the subject matter of the contract is illegal. An example of this is a contract that seeks to address illegal gambling matters.

In comparison, an unconscionable contract may not be illegal in terms of subject matter, but instead is unenforceable due to the circumstances in which the contract was entered into by the parties. In other words, a perfectly legal contract might be considered unconscionable based on the way that one party obtained the other’s signature.

What Is an Unconscionable Contract Remedy?

If the court determines that the contract is unconscionable, it can do three things:
1. Void Contract: The court can void the entire contract as if the contract never existed. Both parties must discharge their performance and repay any money or benefits given to them in preparation of the contract
2. Void Part of the Contract: The courts can also void the contract as far as the unconscionable terms apply to and keep the rest of the contract valid if the remaining terms are still fair and conscionable.
3. Modify the Contract: The court may also uphold the entire contract, but modify the terms of the contract in regards to the unconscionable parts and terms. This will allow the court to avoid the unconscionable result without having to create a entire new contract.
Notice the pre-1900 definitions determine conscionability by use of conscience, common sense, and rationale. Now conscionability is determined by what is fair and equitable, according to the court.
Post Reply