When two parties sign a contract, it`s expected that both parties agree to the terms and conditions outlined in the agreement. However, what happens when one party includes terms that are so unfair and one-sided that they`re deemed unconscionable? That`s when substantive unconscionability comes into play.
Substantive unconscionability refers to contract terms that are so one-sided that they shock the conscience. In other words, these terms are so unfairly favorable to one party and unfavorable to the other that they`re considered unacceptable.
Examples of substantive unconscionability in a contract may include terms that waive the right to sue, limit damages to an unfair amount, or contain hidden fees. These terms may be buried deep in the contract or written in legal jargon that`s difficult for the average person to understand.
When a court determines that a contract contains substantive unconscionability, the contract may be deemed unenforceable. This means that the unfair terms will be stricken from the agreement, and the remaining terms will still be binding.
It`s important to note that substantive unconscionability is different from procedural unconscionability. Procedural unconscionability refers to the circumstances under which the contract was signed, such as undue influence or duress. Substantive unconscionability, on the other hand, refers to the actual terms of the contract.
So, why is substantive unconscionability important? First and foremost, it protects consumers and other parties who may be at a disadvantage when it comes to negotiating a contract. If one party has significantly more bargaining power than the other, they may be able to slip in terms that are heavily in their favor.
Furthermore, enforcing contracts with substantive unconscionability could have a negative impact on society as a whole. It could allow powerful corporations to take advantage of individuals and smaller businesses, leading to an uneven playing field and potentially harmful consequences.
In conclusion, substantive unconscionability is an important concept to understand when it comes to contracts. It refers to the inclusion of terms that are so one-sided and unfair that they shock the conscience. When present, courts may deem the contract unenforceable, protecting consumers and ensuring fairness in business transactions. As such, it`s crucial to ensure that any contract you sign is fair and equitable for all parties involved.