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enforcement would produce unjust results. Without such a mechanism, many courts would, no doubt, manipulate or stretch existing contract doctrines to reach what they felt to be just results. This mechanism finds its legal expression in the term unconscionability , the subject of § 2-302. Section 2-302 applies if the court finds, as a matter of law, that when the contract was made, either the contract itself or any of its terms were unconscionable. In this case, the court may (1) refuse to enforce the overall contract, (2) enforce the contract but without any unconscionable clause, or (3) limit any unconscionable clause’s application to avoid an unjust result. It is generally held, though, that courts cannot award damages for employing an unconscionable contract or clause. Thus, unconscionability is a mere defense, not an affirmative cause of action. [U.C.C. § 2- 302(1) (1951); 2 Hawkland UCC Series§ § 2-302:1, 2-302:5, Westlaw (database updated June 2021).] Note : Most of the time, unconscionability is an issue in contracts to which one party is a consumer. The doctrine seldom rears its head in contracts between merchants or sophisticated businesses. [2 Hawkland UCC Series § 2-302:1, Westlaw (database updated June 2021).] 1. Unconscionability v. a Simple Bad Bargain The unconscionability defense does not apply just because one party entered an unfavorable or disadvantageous bargain. If that were the case, then perhaps the great majority of contracts would be unenforceable, to some extent, on unconscionability grounds. Rather, the unconscionability defense targets terms that are substantially unfair beyond a mere bad bargain, or in the words of some courts, are unduly oppressive, overly harsh, or so one-sided that they shock the conscience. Another common formulation is that unconscionability targets terms that are surprisingly harsh while having little to do with price or other central terms, unreasonably favor the more powerful party, contravene public policy, undermine the very integrity of the bargaining process, or unreasonably seek to negate the affected party’s expectations. To that end, unconscionability often rears its head in connection with (1) contracts of adhesion and (2) boilerplate terms. [ Sanchez v. Valencia Holding Co., LLC , 353 P.3d 741 (Cal. 2015).] a. Contract of Adhesion A contract of adhesion is a standard, form contract that one party prepares for the other to sign. The other party, in turn, is by definition in a weaker position than the party who prepared the form. Indeed, the other party is oftentimes a consumer with relatively little business sophistication compared to the drafter. Oftentimes, the consumer assents to the contract with scarce understanding of its terms and even scarcer meaningful choice but to agree to those terms. Thus, contracts of adhesion are sometimes called take-it-or-leave-it contracts, because the nondrafting party must either accept or reject the contract as a
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