01
Apr2015
unconscionable contract

What is an Unconscionable Contract?

You may be wondering what is an unconscionable contract? Our legal system assumes that agreements reached between two or more parties are fair and freely entered into. Without evidence suggesting otherwise, the legal system presumes that both parties understand the contract’s terms. But what if this was not the case? What if one party was in a much better position to insist on terms that were favorable to them?

What is an Unconscionable Contract?

Any reasonably informed individual would not enter into this type of contract because its terms are so disadvantageous. When a court is looking at this type of contract, the court can do several things.

(1) Refuse to enforce the contract at all, relieving both parties of their obligations and treat the situation as if no contract existed

(2) Enforce the contract except for the unfair term

(3) The court can enforce the contract in such a way so as to avoid an unconscionable result. The court can limit the type and amount of damages available.

When is a Court Likely to Find a Contract Unconscionable?

There are certain situations in which a court is likely to find that the parties entered into an unconscionable contract. These situations include:

  • Duress, where one party physically threatens the other or puts unacceptable commercial pressure on the other party to sign the contract. Duress is difficult to prove, especially where no physical force or threat of physical force is involved.
  • Unconscionable bargaining power, where it is clear that one party did not understand or could not have understood the consequences of signing the contract.
  • Limitations on remedies, in which one party insists that the other party waive its rights to pursue certain remedies or agree to pursue only a limited range of remedies.

Proving that a contract is unconscionable and therefore unenforceable is a common tactic used by parties who do not want to be legally obligated to keep their promises. But the party that wishes to claim a contract is unconscionable “bears the burden” of producing evidence showing that the contract is in fact unconscionable. Often, more evidence is needed than simply the party’s testimony that he or she did not understand what he or she was signing.

How the Patterson Law Firm Can Help

Having a court find a contract unconscionable can be either a great victory or a disaster. In either case, the Patterson Law Firm is here to help you. Where a contract is unfair, we can help you get out from under the burdens of the contract. Where the contract is fair and the other party wants to avoid their obligations, we can help ensure the court enforces the agreement. Contact us today at (312) 223-1699 to discuss your contract dispute.