Ch. 17 - Unconscionability Flashcards
midterm prep
where unconscionability must apply
- The procedures used in forming the contract (procedural unconscionability)
- The substantive terms (substantive unconscionability)
remedies
- rescission
- severance
- reformation
rescission
rescind the entire contract
severance
severing the offensive terms & enforcing the remainder of the contract
reformation
court replaces unconscionable provision with a fairer set of terms
procedural unconscionability
unfairness in the bargaining power
procedural unconscionability elements
- gross inequality in bargaining power
- unfair surprise
substantive unconscionability elements
- Overly harsh allocation of the risks no justified by the circumstances
- Great price disparity
gross inequality in bargaining power
Party lacks a meaningful choice
- Ex. Adhesion contracts (take it or leave it contracts like gym memberships)
unfair surprise
- When the reasonable expectations of a party are disappointed as a result of the bargaining process
- Lack of actual knowledge of the terms
- Sharp Bargaining Practices
- Complex and Hidden Terms in a complicated Document
Great price disparity test
compare the price actually being paid by the complaining party to the price being paid by other similarly situated consumers in a similar transaction
Lack of actual knowledge of the terms
Weaker party may not understand the terms bc of lack of education or poor cognitive skills
sharp bargaining practices
Marketing techniques that border on being dishonest and misleading
Complex and Hidden Terms in a complicated Document
When a party purposefully makes a document more difficult to parse than necessary
unconscionability test
sliding scale
