One defense to contract formation is unconscionability, which some jurisdictions require two components: procedural uncon. and substantive uncon.
The first component requires some kind of "bargaining defect" such as fraud, duress, misrepresentation, etc
The second component generally must have terms so one-sided that it "shocks the conscience."
I am perplexed how these jurisdictions do this analysis because wouldn't meeting the first component be sufficient as a formation defense?
Contracts Question Forum
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clshopeful
- Posts: 387
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Re: Contracts Question
No, the first element doesn't need to be real fraud/misrepresentation. It's less strict than that; all you need for element #1 is something suspicious.. like a young salesman doing a 3 hour demonstration at an old lady's house and then really begging her to buy the product. This example may not meet the fraud/misrepresentation elements, but its still suspicious and is kind of like undue influence. Thats what element #1 is asking; was there something during the bargaining that seems unfair, like the party was taken advantage of? If so, and the deal itself is wildly one-sided, it can be voided for unconscionability.
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pancakes3
- Posts: 6619
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Re: Contracts Question
don't conflate.Cavalier-336 wrote:One defense to contract formation is unconscionability, which some jurisdictions require two components: procedural uncon. and substantive uncon.
The first component requires some kind of "bargaining defect" such as fraud, duress, misrepresentation, etc
The second component generally must have terms so one-sided that it "shocks the conscience."
I am perplexed how these jurisdictions do this analysis because wouldn't meeting the first component be sufficient as a formation defense?
you present argument 1: this contract had defects during formation due to fraud/duress/misrepresentation and was never properly formed.
you present argument 2: alternatively, this contract is unconscienable and should be set aside. it satisfies both the procedural and substantive prongs.
- it was procedurally unconscienable because...
- it was substantively unconscienble because...
