It is more difficult to find unconscionability in business contexts because it’s hard to argue that there is a difference in bargaining position. When the contract is by the unconscionability,” “permeated the court cannot simply strike the clause that is problematic. No damages awarded. 1965 Facts: Payments applied to one’s account were prorated to pay for each object on the account so it was almost impossible to pay things off. Holding: This could very well be unconscionable if found by the court. Rationale: Court must look at the ability to understand the contract. Also, if there was no bargaining power, there could not have been consent to all terms. 1969 Facts: $300 freezer ends up being sold by door-to-door salesman for about $1,400. Holding: Defendant can keep the $600 that has been paid and plaintiff is required to pay no more. Rationale: We should resist people taking advantage of the uneducated. In this case, the defendant was more than properly compensated. 2000 Facts: Plaintiffs allege they were discriminated against for their heterosexual orientation but were compelled to arbitrate their claims. The employer was not held to any arbitration requirement. Holding: The one-sided nature of the contract makes it unconscionable. Rationale: Employment contracts must be closely scrutinized because employees are at their most desperate time. In this case there was a lack of mutuality (arbitration is not always bad).
It is more difficult to find unconscionability in business contexts because it’s hard to argue that there is a difference in bargaining position. When the contract is “permeated by the unconscionability,” the court cannot simply strike the clause that is problematic. No damages awarded. 1965 Facts: Payments applied to one’s account were prorated to pay for each object on the account so it was almost impossible to pay things off. Holding: This could very well be unconscionable if found by the court. Rationale: Court must look at the ability to understand the contract. Also, if there was no bargaining power, there could not have been consent to all terms. 1969 Facts: $300 freezer ends up being sold by door-to-door salesman for about $1,400. Holding: Defendant can keep the $600 that has been paid and plaintiff is required to pay no more. Rationale: We should resist people taking advantage of the uneducated. In this case, the defendant was more than properly compensated. 2000 Facts: Plaintiffs allege they were discriminated against for their heterosexual orientation but were compelled to arbitrate their claims. The employer was not held to any arbitration requirement. Holding: The one-sided nature of the contract makes it unconscionable. Rationale: Employment contracts must be closely scrutinized because employees are at their most desperate time. In this case there was a lack of mutuality (arbitration is not always bad).
Contracts_Murphy_Fall_2011.docx