Pg 25 Flashcards
What are the procedural and substantive elements for unconscionability?
– Procedural: looks at the way the contract was formed
– Substantive: looks at the bargaining or terms itself
– Consideration of both
What is the only type of law that unconscionability applies to?
Contracts
What is involved in the procedural element of unconscionability?
It looks at the way that the contract was formed. If it was formed because of: duress, deceit, sharp practices, or unfair bargaining, then it’s unconscionable.
Courts look beyond the four corners of the contract and examine things like: the relative bargaining strength, sophistication of the parties, extent that either party felt free to accept or decline terms demanded by the other, preclusion of any meaningful choice by the other party, etc.
What is involved in substantive unconscionability?
This considers the bargain and the terms themselves to ask if they are unfair, one-sided, illegal, violations of public policy, etc.
What does it mean for unconscionability that the court will look at both procedural and substantive?
It will look at both the way the contract was formed and the bargain terms to decide if the agreement is severely oppressive to one side. It will not enforce an agreement if it is
What are remedies for unconscionable contracts?
– INVALIDATION of the entire agreement
– REMOVE the unconscionable PROVISION of the contract and enforce the rest
– LIMIT application of the unconscionable provisions so that the contract can be enforced as written
If a court decides to award attorney’s fees, what are the two major rules?
– Majority CL American rule
– Extreme minority English rule
What is involved in the common law majority American rule for awarding attorney fees?
Each party in a civil action is responsible for their own attorney fees.
What is the rationale behind the American rule when it comes to awarding attorney fees?
This favours access to the courts
What are the exceptions to the American common law rule for awarding attorney fees?
– statutory exceptions – contractual agreement – common fund – third-party tort – bad faith
What would be statutory exceptions to the CL American rule for awarding attorney fees?
If there is a state or federal legislation that allows or requires a court to award attorney fees to the prevailing party for certain types of actions. This often happens in one of three ways:
- statute refers to recovery of costs and reasonable attorney fees: recovery is separate from the recovery of costs
- the statute refers to recovery of costs including attorney’s fees: attorney fees are recoverable as part of the recovery of costs
– statute authorizes recovery of costs and expenses including attorney fees
How can a contractual agreement be an exception to the CL majority American rule for awarding attorney fees?
A contract can agree to the recovery of attorney fees incurred by the nonbreaching party as part of compensable damages
What is a common fund as an exception to the common law American rule with regard to awarding attorney fees?
When a party hires an attorney and it results in a fund or recovery that will benefit third parties, the third parties are required to assume a fair share of the attorney fees that resulted from generating the fund in order to avoid unjust enrichment. I.e.: shareholder derivative suit can get attorney fees if it can be shown that they conferred a substantial benefit to the corporation because of their efforts
How can bad faith be an exception to the majority CL American approach with regard to awarding attorney fees?
If a party acts in egregious bad faith and it results in injuries to the defendant, the court has discretion to give attorney fees to the prevailing party. This usually applies to insurance companies.
What is involved in the extreme minority English rule to the awarding of attorney fees?
This is only and followed in Alaska and it says that the losing party is responsible to pay all attorney fees
