Business Law Assignment | Concept of Unconscionability
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Added on 2020-05-16
Business Law Assignment | Concept of Unconscionability
Added on 2020-05-16
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Running head: BUSINESS LAWBusiness LawName of the StudentName of the UniversityAuthor Note
1BUSINESS LAWThe concept of Unconscionability had been brought into the legal word for the purpose ofupholding fair play and equity in relation to contracts. As defined by Goldberger (2016)unconscionability is a doctrine in relation to contract law which is used for the purpose ofdefining those provisions in a contract which are unjust to an extent which is not in accordanceto good conscience or are largely in favor of only one of the parties to the contract having highbargaining power as compared to the other party. In situation where unconscionability is foundin relation to a contract, the contract is made unenforceable it would have not been agreed by anyinformed or reasonable person otherwise. The person who has initiated the addition of theunconscionable term in a contract is not provided the benefit of the contract as contract isconsidered as not having or having inadequate consideration. Although as per the rule ofconsideration the mere presence of it makes a contact valid, the identification of unconsionablityin the terms nullifies the consideration rule in such situation. The court declares such contract asunenforceable when it is established that it would be vastly unjust to make the contact binding onthe party who wants to escape it. The determination of unconsionability in relation to the contract is done by analyzing thecircumstances which lead to the formation of the contract in context. Then in order to establishunconsionability in a contact an unconscionable conduct has to be present at the very time offormation of the contract any conduct which has taken place after the contract has been formed isirrelevant in the situation. No standardized criteria for the purpose of determining the presenceof unconsionability in a contract exists and is limited to the subjective findings of the judge. Theconcept is only applied to nullify a contract where if the contract is validated it would be anaffront to the judicial system’s integrity. A great deal of flexibility is available to the court inrelation to the remedies which could be provided in the situation. The court in this situation may
2BUSINESS LAWtotally nullify the contract by stating that it lacked free consent and was forced to be signed orunder misunderstanding and duress, or the court may refuse to implement the clause in relationto a contract which is unconscionable or awards damages or necessary actions through which afair outcome to the contract may be achieved. There are various situation which may lead to a conduct which is unconscionable innature. Some of the most frequently found causes are discussed in this section of the paper. Insituations where the contractual business transaction is sophisticated in nature and constitutesboilerplate language which is not generally understood by such person or an average person mayconstitute unconscionable conduct. This language may be in relation to disclaimer of warrantiesand extended liabilities within a contract. Where the price of the goods are widely inflated by a seller and where the inflation hasbeen done in such a way that the total cost which the buyer is liable to pay is concealed fromhim, it accounts to an unconscionable conduct. Another example in relation to the situation iswhen imposition of severe penalty provision is done with respect to failing to pay installmentsfor loan in a prompt manner and such terms are hidden physically through small prints or middleof a paragraph in a lengthy agreement. The court in this situation may come to a conclusion thatthere has been no meeting of mind in relation to the parties to the contract and the terms of thecontract have not been accepted by the weaker party (Chew 2014). In situation where a standardized contract of adhesion is provided by the seller in relationto the purchase of necessary services and goods such as transport, food and shelter to the buyeron “accept it or leave it” terms without providing any reasonable opportunity to the buyers tobargain an unconscionable conduct may arise. Although standard for of contracts are totally legal
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