Also known as: unconscionable
Written by attorneys · grounded in primary & secondary sources — see below
A judicial determination that enforcement of an agreement or term would be so unfair as to shock the conscience. Courts apply the standard to refuse enforcement of the entire agreement, to excise or limit the offending term, or to invite revision of the agreement.
Connor Clark, owner of a small medical-device firm, signed a three-year exclusive supply deal with Cardinal Insurance after both sides assumed a key patent remained active. When the patent turned out to have expired, the fixed low price produced ruinous losses for Clark. A court found that enforcement would be clearly unconscionable and permitted rescission.
Carmen Choi bought commercial fuel on open account from Crystal Dynamics under a credit agreement containing grossly inflated pricing. After a court declared the entire agreement void for unconscionability, the supplier attempted to foreclose on a deed of trust securing the debt. The court held that no enforceable obligation remained to support foreclosure.
Select any source to read its text and confirm it supports the definition.
Cade Carpenter and Cassandra Cooper signed a separation agreement that divided pensions and set maintenance. At the dissolution hearing the court examined their economic circumstances and found the pension valuation substantially understated, rendering the agreement clearly unconscionable. The court requested a revised agreement.
Carlos Castillo and Christopher Collins executed a premarital agreement waiving spousal support. After signing, a material change in circumstances left one spouse eligible for public assistance. The court refused to enforce the waiver because enforcement would be clearly unconscionable.
Crown Pharmaceuticals employed an inventor who later settled disputes by assigning rights in a pending application. After the inventor developed further improvements, enforcement of the broad assignment would have produced clearly unconscionable results. The court limited the term to avoid that outcome.
Central Dynamics sold consumer goods to a buyer under a contract that excluded consequential damages for personal injury. When the buyer suffered injury, the court held the exclusion prima facie unconscionable and refused to enforce it.
The court must consider the economic circumstances of the parties and any other relevant evidence. If the agreement is clearly unconscionable, the court may request a revised agreement or issue its own orders on property, maintenance, and support.
Supporting sources
No. A court may refuse to enforce the contract, enforce the remainder without the unconscionable clause, or limit the application of the clause to avoid an unconscionable result.
Supporting sources
A limitation or exclusion of consequential damages for injury to the person in the case of consumer goods is prima facie unconscionable, though a limitation where the loss is commercial is not.
Supporting sources
…any need for the State to rely, as it does, upon its own interests rather than upon the patient's. The second assumption is unconscionable. Insofar as Nancy Cruzan has an interest in being remembered for how she lived rather than how she died, the damage done to those memories by the prolongation of her death is irreversible.…