Unconscionability in Contract Law Definition

Unconscionability in Contract Law: A Definition

In contract law, terms that are considered unconscionable can be struck down by a court, rendering them unenforceable. But what does it mean for a contract to be unconscionable?

First, it`s worth noting that unconscionability is a relatively new concept in contract law. It wasn`t until the 1960s that the courts began to recognize that some contracts could be so one-sided or oppressive that they should be invalidated.

In general, there are two types of unconscionability: procedural and substantive.

Procedural unconscionability refers to the circumstances surrounding the formation of the contract. For example, if one party is given no opportunity to negotiate the terms of the contract, or if the terms are hidden in fine print that is difficult to read, that could be considered procedurally unconscionable.

Substantive unconscionability, on the other hand, refers to the actual terms of the contract. For example, a contract that requires one party to give up all their legal rights without any compensation could be considered substantively unconscionable.

It`s worth noting that not all unfair contracts are unconscionable. In order for a court to find a contract unconscionable, it must be both procedurally and substantively unconscionable. That means that the circumstances surrounding the formation of the contract must be unfair, and the terms of the contract themselves must also be unfair.

So, what happens if a court finds a contract unconscionable? Typically, the court will refuse to enforce the offending terms of the contract. In some cases, the entire contract may be invalidated. This can be a powerful tool for individuals who have been pressured into signing unfair contracts, as it allows them to escape from the most onerous terms.

In conclusion, unconscionability is an important concept in contract law that provides protections for individuals against unfair and one-sided contracts. To be considered unconscionable, a contract must be both procedurally and substantively unfair, and if such a contract is found, the court may invalidate some or all of its terms. As such, individuals should always read contracts carefully and seek legal advice if they have any concerns about the fairness of the terms.