Unconscionability under the common law and under the UCC - Next Generation Bar Exam

1. What is the usual effect of a high price alone on a claim of unconscionability?

   It is rarely sufficient without procedural unfairness. Courts do not police the adequacy of exchange absent a defect in the bargaining process.

2. What is the general enforceability of a standardized contract of adhesion?

   It is generally enforceable, subject to unconscionability and reasonable-expectations limits. Adhesion alone does not invalidate a contract, but terms beyond what the adhering party would reasonably expect may not be enforced.

3. At what time is unconscionability measured?

   At the time the contract was made. Later changes in circumstances do not make a contract unconscionable.

4. How do most courts combine procedural and substantive unconscionability?

   They require both, often on a sliding scale where more of one requires less of the other. A few courts allow extreme substantive unfairness alone to suffice.

5. Who decides whether a contract or clause is unconscionable?

   The court, as a matter of law. Unconscionability is not a jury question.

6. Under UCC 2-302, what may a court do with a contract or clause it finds unconscionable?

   Refuse to enforce the contract, enforce the rest without the clause, or limit the clause's application. The common law, through the Restatement (Second), gives courts the same options.

7. What is procedural unconscionability?

   Unfairness in the bargaining process, such as lack of meaningful choice, hidden terms, or great inequality of bargaining power. Fine print, high-pressure tactics, and a party's limited understanding are typical indicators.

8. What is substantive unconscionability?

   Terms that are unreasonably favorable to one party. The focus is on the harshness of the terms themselves.

9. A store's fine-print credit clause lets it repossess every item a low-income buyer ever bought until all balances are paid. What doctrine lets a court refuse enforcement?

   Unconscionability. Hidden terms, unequal bargaining power, and a one-sided cross-collateral clause combine procedural and substantive unfairness.

10. Under UCC 2-302, what must a court allow before ruling that a clause is unconscionable?

    A reasonable opportunity to present evidence of its commercial setting, purpose, and effect. The court considers the clause in its commercial context, not in isolation.

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