Unconscionable Contract Lawyers

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What Are Unconscionable Contracts?

Unconscionable contracts are those contracts which are so unfair to a party that no reasonable or informed person would agree to it. In a suit for breach of contract, a court will void an unconscionable contract. That means the court will not award damages or order specific performance against the person unfairly treated.

When Are Contracts Unconscionable?

Contracts are unconscionable if a party was misled, lacked information or signed under pressure or misunderstanding. Generally, unconscionable contracts are grouped into one of three categories:

Duress

Duress involves either physical threats or unacceptable commercial pressure used to make someone sign a contract. A successful plea of duress will result in a contract being held to be voidable. There are three recognized forms of duress:
  • Physical Duress
  • Duress of Goods
  • Economic Duress
Physical duress is the use of force, false imprisonment or compelling someone to act contrary to his/her wishes or interests. Physical duress cases are relatively rare.

Duress of goods occurs when someone will not release goods in order to persuade the other party to sign a document or pay some money. The threat not to release the goods must be an illegitimate threat. However, there are situations where it is perfectly legal to hold onto someone’s goods to pressure them to pay, for example, in car repair; it is perfectly legal for the repairer to hold onto a car until the bill is paid.

Economic duress occurs when some form of unacceptable commercial pressure results in advantages secured by the use of such pressure. However, it is sometimes very difficult to distinguish between unacceptable and acceptable commercial pressure.

Undue Influence

Undue influence refers to the amount of pressure one party uses to force the other to sign a contract or a will. Undue influence falls into two categories: those where there is a presumption of undue influence because the law assumes that one party must have taken advantage of the other party; and those where there is an appearance of undue influence due to the particular nature of the case.

Unconscionable Bargaining Power

Unconscionable bargaining occurs in instances where there is no pressure or undue influence, but it is obvious to one party that the other did not comprehend the consequences of signing the contract.

Should I Consult a Lawyer about Whether or Not this Contract Is Unconscionable?

Contract law can be quite complicated and determining whether a contract is unconscionable can be difficult. An attorney can assist you in this determination and explain to you the merits of your case. Additionally, every state has different procedures for filing suit. An attorney can help a party conform to the applicable procedural rules and collect all the proper documents to contest or claim an unconscionable contract.

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Last Modified: 07-17-2012 02:30 PM PDT

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