UNCONSCIONABILITY

Question 1

UNCONSCIONABILITY

Answer 1

A) This defense focuses on the unfair bargaining process and the unfair results

Question 2

Procedural unconscionability

Answer 2

bargaining process that produced the contract in question created an absence of meaningful choice for the aggrieved party

(i) I.e. absence of bargaining power, fine-print terms
(ii) We will consider things like education levels, whether terms are hidden, etc.
(iii) Similar to duress

Question 3

Substantive unconscionability

Answer 3

contract terms are unreasonably unfavorable to the aggrieved party

(i) I.e. excessive price, disproportional consequences for a minor breach, provisions binding only one of the parties, provisions which are grossly unfair
(ii) Similar to fraud

Question 4

Remedies for unconscionability

Answer 4

1. refuse to enforce the contract
2. get rid of the offending clause and enforce the remainder of the contract
3. limit the application of the offending clause as to avoid any unconscionable result

Question 5

UCC §2-302

Answer 5

Unconscionability

1) Unconscionability is a matter of law
2) We determine unconscionability from the time the contract was made
a) Would the aggrieved party agreed to the provision in question if she had fully understood it?
3) Court has discretion whether or not to enforce
4) Court can blue pencil—enforce the rest of the contract if it chooses

Question 6

Crystal vs. Mud Rules

Answer 6

1) Crystal—clear, no ambiguity, easy to apply
2) Mud—unclear, ambiguous, etc. (i.e. good faith, unconscionability)
3) Difference between unconscionability and good faith: good faith requires a duty and a level of discretion in exercising that duty. Unconscionability doesn’t require that

Question 7

UNCONSCIONABILITY Balancing test

Answer 7

1. gross inequality of bargaining power
2. unfair surprise by the one of the parties
3. lack of education of one of the parties.
4. hidden terms in the fine print of the contract