Contracts Unconscionability Law and Legal Definition

Unconscionable in legal terms refers to a contract or bargain which is 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 not enforce an unconscionable contract. The court in such a case will determine that to enforce the contract would be grossly unfair to one of the parties based upon their being misled, lacking information or signing under duress or misunderstanding, often due to the acts of the person seeking enforcement.

The following is an example of a state statute dealing with unconscionable clauses in contracts:

  1. If the court as a matter of law finds the contract or any clause of the contract to have been unconscionable at the time it was made the court may refuse to enforce the contract, or it may enforce the remainder of the contract without the unconscionable clause, or it may so limit the application of any unconscionable clause as to avoid any unconscionable result.
  2. When it is claimed or appears to the court that the contract or any clause thereof may be unconscionable, the parties shall be afforded a reasonable opportunity to present evidence as to its commercial setting, purpose and effect to aid the court in making the determination."