The unconscionability defense is concerned with the fairness of both the process of contract formation and the substantive terms of the contract. When the terms of a contract are oppressive or when the bargaining process or resulting terms shock the conscience of the court, the court may strike down the contract as unconscionable.
The unconscionability defense applies to a wide variety of types of conduct, so a court will look at a number of factors in determining if a contract is unconscionable. If there is a gross inequality of bargaining power, so the weaker party to the contract has no meaningful choice as to the terms, and the resulting contract is unreasonably favorable to the stronger party, there may be a valid claim of unconscionability. A court will also look at whether one party is uneducated or illiterate, whether that party had the opportunity to ask questions or consult an attorney, and whether the price of the goods or services under the contract is excessive.
Contract Defenses: Public Policy and Illegality
Rather than protecting the parties to a contract as other contract defenses do, the defenses of illegality and violation of public policy seek to protect the public welfare and the integrity of the courts by refusing to enforce certain types of contracts. Contracts to engage in illegal or immoral conduct would not be enforced by the courts.
Contract Defenses: Mistake
A contract can be canceled on the grounds of mutual mistake of fact. In order to cancel a contract for mistake, both parties must have made a mistake as to a basic assumption on which the contract was based, and the mistake must have a material effect upon the agreed exchange. The mistake must relate to facts existing at the time the contract is made. In addition, the party seeking to avoid the contract must not have contractually assumed the risk of mistake. Parties sometimes attempt to claim mistake as a defense to a contract when they have failed to read the contract and later become aware of terms they dislike. Failure to read the contract is not a defense. A person who signs a contract is presumed to know what it says, and is bound to the terms she would have known about, had she read the contract.
สมัครสมาชิก:
ส่งความคิดเห็น (Atom)
ไม่มีความคิดเห็น:
แสดงความคิดเห็น