Rules to Memorize
Unconscionability
The doctrine of unconscionability has both a procedural and a substantive element, the former
focusing on lack of meaningful choice or unfair surprise due to unequal bargaining power, the
latter on overly harsh or one-sided results. A sliding scale can be applied to determine
unconscionability, the more substantively oppressive the terms, the less evidence of procedural
unconscionability is required to conclude the terms unenforceable, and vice versa. Courts may
find an entire contract as a whole or a particular clause to be unconscionable.
A. Procedural Unconscionability

A contract is procedurally unconscionable if there is a significant inequality in bargaining
power preventing one party to have a meaningful choice or real alternative in setting the
terms of the agreement, or the contract involves some aspect of unfair surprise.
Procedural unconscionability as a whole inquires whether the formation of the contract
was so far removed from what is expected in a contract negotiation, such as voluntariness
to enter and that the terms are not unduly harsh.
o Lack of Meaningful Choice: Did ______ have a meaningful choice where____?

Lack of meaningful choice arises when during contract formation there
was an inequality in bargaining power which results in no real negotiation.
o Unfair surprise: Was _____ unfairly surprised where _____?

Unfair surprise arises when the party signing the contract may not have
been able to examine the contract fully as there might have been hidden
clauses or they may not have the knowledge of various legal terminology
making it difficult to understand.

Hidden Clauses

Hidden clauses do not necessarily mean hidden, it could mean that
there are no paragraph headings, the text is in small print, or poor
visibility of the terms.

Failure to Understand

Failure to understand may encompass not seeing the clause (being
on a different page) or a person not having sufficient knowledge or
expertise to understand the terms of the contract.

Conclusion
B. Substantive Unconscionability

A contract is substantive unconscionable if one of the contracting parties gains an
advantage in the formation/negotiation of the contract and uses that advantage to, in
effect, create a one-sided contractual relationship through the terms of the agreement.

Arbitration Clauses (location): Is a clause that requires both parties to file
C. Can the court SEVERE
Promissory Estoppel
Promissory Estoppel is an alternative theory of recovery, not a substitution for consideration. It is
not necessary that the promisee to show that there was an offer and an acceptance to prevail.
There are three elements set forth by Restatement section 90.

Expected Reliance
o Restatement section 90 states, “A promise which the promisor should reasonably
expect to induce action or forbearance on the part of the promisee or a third
person …”

Actual Reliance
o Restatement section 90 continues, “and which does induce such action or
forbearance.

Will injustice result if promise is not enforced
o
Statute of Frauds
A party defends against the contract being enforced by arguing the contract into which it has
entered with the plaintiff is of a type that must be in writing and, because it is not in writing, the
defendant’s promises must not be enforced. This defense is disfavored because it results in an
otherwise perfectly valid contract being rendered unenforceable simply because it lacks the
formality of a writing.
YLS