Judgment
J. Skelly Wright held that the case needed to be sent back to trial to determine further facts, but in doing so, he held that a contract may be set aside if it was procured by unconscionable means.
...we hold that where the element of unconscionability is present at the time a contract is made, the contract should not be enforced ...
Unconscionability has generally been recognized to include an absence of meaningful choice on the part of one of the parties together with contract terms which are unreasonably favorable to the other party....
In many cases the meaningfulness of the choice is negated by a gross inequality of bargaining power ...
The manner in which the contract was entered is also relevant to this consideration. Did each party to the contract, considering his obvious education or lack of it, have a reasonable opportunity to understand the terms of the contract, or were the important terms hidden in a maze of fine print and minimized by deceptive sales practices? Ordinarily, one who signs an agreement without full knowledge of its terms might be held to assume the risk that he has entered a one-sided bargain. But when a party of little bargaining power, and hence little real choice, signs a commercially unreasonable contract with little or no knowledge of its terms, it is hardly likely that his consent, or even an objective manifestation of his consent, was ever given to all the terms. In such a case the usual rule that the terms of the agreement are not to be questioned should be abandoned and the court should consider whether the terms of the contract are so unfair that enforcement should be withheld.
Arbitration, in the context of the law of the United States, is a form of alternative dispute resolution. Specifically, arbitration is an alternative to litigation through which the parties to a dispute agree to submit their respective positions to a neutral third party for resolution. In practice arbitration is generally used as a substitute for litigation, particularly when the judicial process is perceived as too slow, expensive or biased. In some contexts, an arbitrator may be described as an umpire.
An end-user license agreement is a legal contract entered into between a software developer or vendor and the user of the software, often where the software has been purchased by the user from an intermediary such as a retailer. A EULA specifies in detail the rights and restrictions which apply to the use of the software.
A standard form contract is a contract between two parties, where the terms and conditions of the contract are set by one of the parties, and the other party has little or no ability to negotiate more favorable terms and is thus placed in a "take it or leave it" position.
A clickwrap or clickthrough agreement is a digital prompt that offers individuals the opportunity to accept or decline a digitally-mediated policy. Privacy policies, terms of service and other user policies, as well as copyright policies commonly employ the clickwrap prompt. Clickwraps are common in signup processes for social media services like Facebook, Twitter or Tumblr, connections to wireless networks operated in corporate spaces, as part of the installation processes of many software packages, and in other circumstances where agreement is sought using digital media. The name "clickwrap" is derived from the use of "shrink wrap contracts" commonly used in boxed software purchases, which "contain a notice that by tearing open the shrinkwrap, the user assents to the software terms enclosed within".
A forum selection clause in a contract with a conflict of laws element allows the parties to agree that any disputes relating to that contract will be resolved in a specific forum. They usually operate in conjunction with a choice of law clause which determines the proper law of the relevant contract.
Unconscionability is a doctrine in contract law that describes terms that are so extremely unjust, or overwhelmingly one-sided in favor of the party who has the superior bargaining power, that they are contrary to good conscience. Typically, an unconscionable contract is held to be unenforceable because no reasonable or informed person would otherwise agree to it. The perpetrator of the conduct is not allowed to benefit, because the consideration offered is lacking, or is so obviously inadequate, that to enforce the contract would be unfair to the party seeking to escape the contract.
James Skelly Wright was a United States Circuit Judge of the United States Court of Appeals for the District of Columbia Circuit and previously was a United States District Judge of the United States District Court for the Eastern District of Louisiana.
English contract law is the body of law that regulates legally binding agreements in England and Wales. With its roots in the lex mercatoria and the activism of the judiciary during the industrial revolution, it shares a heritage with countries across the Commonwealth, from membership in the European Union, continuing membership in Unidroit, and to a lesser extent the United States. Any agreement that is enforceable in court is a contract. A contract is a voluntary obligation, contrasting to the duty to not violate others rights in tort or unjust enrichment. English law places a high value on ensuring people have truly consented to the deals that bind them in court, so long as they comply with statutory and human rights.
Contract law regulates the obligations established by agreement, whether express or implied, between private parties in the United States. The law of contracts varies from state to state; there is nationwide federal contract law in certain areas, such as contracts entered into pursuant to Federal Reclamation Law.
Lloyds Bank Ltd. v. Bundy[1974] EWCA 8 is a landmark case in English contract law, on undue influence. It is remarkable for the judgment of Lord Denning MR who advanced that English law should adopt the approach developing in some American jurisdictions that all impairments of autonomy could be collected under a single principle of "inequality of bargaining power."
Unconscionability in English law is a field of contract law and the law of trusts, which precludes the enforcement of voluntary obligations unfairly exploiting the unequal power of the consenting parties. "Inequality of bargaining power" is another term used to express essentially the same idea for the same area of law, which can in turn be further broken down into cases on duress, undue influence and exploitation of weakness. In these cases, where someone's consent to a bargain was only procured through duress, out of undue influence or under severe external pressure that another person exploited, courts have felt it was unconscionable to enforce agreements. Any transfers of goods or money may be claimed back in restitution on the basis of unjust enrichment subject to certain defences.
Cobbe v Yeoman's Row Management Ltd[2008] UKHL 55 is a House of Lords case in English land law and relates to proprietary estoppel in the multi-property developer context. The court of final appeal awarded the project manager £150,000 on a quantum meruit basis for unjust enrichment because Yeoman's Row had received the benefit of his services without paying for that. The court refused to find or acknowledge a binding contract, prior arrangement with a third party or promise, overturning a £2m award on the basis of a possible lien arising from a promise over the property. The court found a non-binding agreement in principle, entirely subject to the owner's final say to take into account for example their view of the market; this was the basis on the facts on which the parties were proceeding.
Inequality of bargaining power in law, economics and social sciences refers to a situation where one party to a bargain, contract or agreement, has more and better alternatives than the other party. This results in one party having greater power than the other to choose not to take the deal and makes it more likely that this party will gain more favourable terms and grant them more negotiating power. Inequality of bargaining power is generally thought to undermine the freedom of contract, resulting in a disproportionate level of freedom between parties, and that it represents a place at which markets fail.
DeMarco v. Holy Cross High School 4 F.3d 166 was an employment discrimination case brought under the ADEA. The appellant, Guy DeMarco, was released from employment prior to his eligibility for tenure at the age of forty-nine. Holy Cross High School argued that it was not subject to ADEA laws, and if it were that this case against it was in violation of the Free Exercise Clause and the Establishment Clause of the First Amendment. The defendant also argued that the plaintiff failed to utilize the administrative remedies available.
Alec Lobb (Garages) Ltd. v. Total Oil (GB) Ltd.[1984] EWCA Civ 2 is an English contract law case relating to undue influence.
Dunlop Pneumatic Tyre Co Ltd v New Garage & Motor Co Ltd[1914] UKHL 1 is an English contract law case, concerning the extent to which damages may be sought for failure to perform of a contract when a sum is fixed in a contract. It held that only if a sum is of an unconscionable amount will it be considered penal and unenforceable.
Macaulay v Schroeder Music Publishing Co Ltd [1974] 1 WLR 1308 is an English contract law decision of the House of Lords relating to restraint of trade.
Commercial Bank of Australia Ltd v Amadio, is a seminal case in Australian contract law and equity, in which the High Court held that unconscionable dealing due to a lack of knowledge or education and the consequent imbalance in bargaining power could lead to a transaction being set aside.
Nichols v Jessup [1986] 1 NZLR 226, is a New Zealand case regarding unconscionable bargains, and it set the threshold for an unconscionable bargain is that the stronger party did not have to have actual knowledge of the other party having a disability, but merely that the stronger party should have had suspicions that the other party had a disability.
Douez v Facebook Inc., 2017 SCC 33 is a Supreme Court of Canada case which analyzes the enforceability of forum selection clauses in consumer facing contracts.
