Unconscionability - Jan. 23 Flashcards
What is undue influence? (R)
Undue influence is unfair persuasion of a party who is under the domination of the person exercising the persuasion or who by virtue of the relation between them is justified in assuming that that person will not act in a manner inconsistent with his welfare. (177)
When does undue influence make a contract voidable? (R)
(1) If a party’s manifestation of assent is induced by undue influence by the other party, the contract is voidable by the victim.
(2) If a party’s manifestation of assent is induced by one who is not a party to the transaction, the contract is voidable by the victim unless the other party to the transaction in good faith and without reason to know of the undue influence either gives value or relies materially on the transaction. (177)
When may a court grant restitution where a party withdraws or situation is contrary to public interest? (R)
If a contract or term thereof is unconscionable at the time the contract is made a court may refuse to enforce the contract, or may enforce the remainder of the contract without the unconscionable term, or may so limit the application of any unconscionable term as to avoid any unconscionable result. (208)
According to the holding in Ryan v. Weiner, when may a court refuse to enforce a contract? (DeLong)
A court may refuse to enforce a contract where inadequacy of price is coupled with inequitable or oppressive conduct, undue influence, and gross inequality that shocks the conscience. (97)
What is the doctrine of undue influence? (DeLong)
It permits a court to set aside gifts and bequests that are made by a person who was legally competent and who had legal capacity, but who was under the sway of another person whose influence was “undue” in some way. The influencer and donor had a dominant and submissive relationship, which might have arisen from a fiduciary or confidential relationship. (112)
What is procedural unconscionability? (Q) (DeLong)
Unfairness in a contract that is the result of unequal bargaining power or unfair surprise to one of the parties.
A grossly unfair bargain may not be set aside unless there was something wrong with the way it came about. (102)
What is substantive unconscionability? (Q) (DeLong)
Unfairness in a contract that is the result of excessively oppressive or harsh terms in the contract.
A bargain that was obtained through devious means would not be set aside unless it was substantively unfair or unequal. (102)
