Contract lawLesson 4 of 4 in the course Terms, misrepresentation and vitiating factors

Unconscionability Across Contract Law: Tests, Cases, and Remedies

5 flashcards · 5 quiz questions · 5 match pairs · 5 fill-in sentences · English

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Summary

This lesson introduces unconscionability as a contract-law doctrine and explains when courts may intervene to protect a party from an extremely unfair agreement.

Unconscionability describes conduct or contractual terms that are so extremely unjust or one-sided that enforcing them would offend good conscience. The doctrine commonly concerns a stronger party using superior bargaining power to secure an unfair advantage over a weaker party.

All flashcards

Procedural unconscionability
Unfairness in the contracting process, such as limited choice, pressure, or difficulty understanding important terms.
Substantive unconscionability
Unfairness in contractual terms or outcomes, such as an extreme advantage for one party.
Canadian unconscionability test
It requires inequality of bargaining power and an improvident bargain, assessed in context.
Special disability
A vulnerability that seriously impairs a person's ability to act in their own interests, where the other party knows or should recognize it.
Contract of adhesion
A standardized agreement offered on a take-it-or-leave-it basis, with little realistic opportunity to negotiate.

Quiz questions

  1. Under the Canadian unconscionability test, which two elements must be established?Answer: Inequality of bargaining power and an improvident bargain.
  2. In Uber Technologies Inc v Heller, what made the arbitration clause unconscionable?Answer: The standard-form clause required arbitration in the Netherlands and created a serious practical obstacle to pursuing a claim.
  3. Why did the court set aside the guarantee in Commercial Bank of Australia Ltd v Amadio?Answer: The bank knew of the couple's vulnerability and did not ensure they understood the guarantee's risks.
  4. In National Westminster Bank plc v Morgan, why did the court find no undue influence?Answer: The transaction was not manifestly disadvantageous, and the brief interaction did not establish trust and confidence.
  5. What remedy does Hong Kong's Unconscionable Contracts Ordinance authorize?Answer: A court may refuse to enforce or modify an unconscionable contract or term.

Based on the Wikipedia article Unconscionability, licensed CC BY-SA 4.0. Adapted into a summary, flashcards and quizzes.

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