Contract Law Review: Protecting the Weaker Party from Unfair Contracts, Exams of Contract Law

Download Contract Law Review: Protecting the Weaker Party from Unfair Contracts and more Exams Contract Law in PDF only on Docsity! CONTRACT LAW REVIEW NOTES UNCONSCIONABILITY It refers to situations where one party takes advantage of the other party's weakness or vulnerability in order to enter into an unfair contract. This concept is based on the principle of fairness and equity in contractual relationships, and is intended to protect the weaker party from exploitation. - Unconscionability is a doctrine in contract law that enables a court to refuse to enforce a contract that is found to be grossly unfair or oppressive. - It is based on the idea that certain contracts are so one-sided that they shock the conscience of the court. Key Elements of Unconscionability: a) Inequality of bargaining power: - Unconscionability often arises when there is a significant power imbalance between the parties to a contract. - This can occur when one party is more knowledgeable, experienced, or financially secure than the other party. - Example: A wealthy corporation forcing a small vendor to accept unfavorable contract terms. b) Lack of meaningful choice: - Unconscionability can also be present when one party is deprived of a meaningful choice in entering into a contract. - This may occur when one party is under duress, coercion, or undue influence. - Example: A landlord threatening to evict a tenant unless they sign a lease with exorbitant rent. c) Unfair terms: - Unconscionability can be indicated by the presence of terms in a contract that are excessively one-sided or grossly unfair. - This could include terms that are unreasonably favorable to one party or impose excessive burdens on the other party. - Example: A contract that allows a lender to unilaterally increase interest rates without notice. Types of Unconscionability: a) Procedural unconscionability: - Procedural unconscionability refers to unfairness in the process of negotiating and forming a contract. - This may involve hidden terms, fine print, or deceptive practices that the weaker party is not aware of. - Example: A car dealership burying important terms in the contract in small font. b) Substantive unconscionability: