Unconscionability
Also known as: Unconscionable Contract, Unconscionable Clause
A legal doctrine that allows courts to refuse to enforce contract provisions that are so unfair or one-sided that they shock the conscience. Courts look at both how the contract was formed and how unfair the terms are.
Detailed Explanation
Unconscionability has two components: procedural unconscionability (unfairness in how the contract was formed — no negotiation, hidden terms, high-pressure sales) and substantive unconscionability (unfairness in the terms themselves — grossly one-sided provisions).
Most courts require both components to be present, though a strong showing of one can offset a weaker showing of the other.
In the new construction context, courts have found specific builder contract provisions unconscionable — including habitability waivers, extremely broad arbitration clauses, and provisions that strip buyers of virtually all legal remedies.
In Your Contract
You will not see the word "unconscionability" in the contract itself. It is a legal argument used to challenge specific provisions. The adhesive nature of builder contracts (take-it-or-leave-it) contributes to a finding of procedural unconscionability.
Key Points
- 1Courts can refuse to enforce provisions that are extremely unfair.
- 2Requires both procedural unfairness (how it was formed) and substantive unfairness (how one-sided the terms are).
- 3Builder contracts of adhesion satisfy the procedural element.
- 4Several courts have struck down specific builder contract clauses as unconscionable.
- 5The standard varies by state.
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