Go to navigation Go to content
Toll-Free: (888) 497-3410
Phone: 516.791.5700
Law Offices of Jonathan M. Cooper

One Way a Contract Can Be Held Unenforceable in New York

 

In a fit of pique, you might refer to someone else's behavior as "unconscionable." Interestingly enough, this term also has legal significance in the context of a breach of contract claim.

 

Under New York law, a defendant can defeat a breach of contract claim if it can prove that it was effectively coerced into signing an inherently and grossly unfair agreement. As some courts have phrased it, "[Unconscionability] requires 'some showing of 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.'" Gendot Assocs. Inc. v. Kaufold, 56 AD3d 421, 423 (2d Dept 2008) (citing Williams v. Walker-Thomas Furniture Co., 350 F2d 445, 449 [DC Cir 1965]). "The focus is on such matters as the size and commercial setting of the transaction…, whether deceptive or high-pressured tactics were employed, the use of fine print in the contract, the experience and education of the party claiming unconscionability, and whether there was disparity in bargaining power." Gillman v. Chase Manhattan Bank, N.A., 73 NY2d at 11.

 

Thus, there are two elements to unconscionability: procedural and substantive. Procedural unconscionability relates to a gross disparity in the  experience and sophistication of the parties to the agreement. Substantive unconscionability, on the other hand, is where the court makes a determination in extreme cases where the contractual terms are "so outrageous and oppressive as to warrant a finding of unconscionability irrespective of the contract formation process."

 

As you might well guess, the latter component is inherently difficult to prove. And the reason for this should be relatively obvious: it shouldn't be too easy for people to get out of contracts that they sign.