Unconscionable contracts will be declared void by a court of law, and are therefore unenforceable.
So, what is an unconscionable contract?
An unconscionable contract is essentially a contract that is so unfair and one-sided that it would be a serious injustice for the law to allow the contract to be enforced. Generally, this unfairness is not tied to the mere “business” of the contract itself (for example, a contract that requires a poor strategic decision by one party is not necessarily unconscionable). Instead, whether a contract is unconscionable is usually tied to questions of choice and bargaining power.
Understanding what constitutes an unconscionable contract can be a bit difficult when just reading about the theory, so let’s crack open a few examples to help illustrate the concept in more practical terms.
Suppose, for example, that someone approaches you with a contract that you’re not particularly interested in signing. Instead of simply asking you if you’d like to enter into a contract, however, the person threatens you with violence if you do not relent. The addition of a threat — whether physical, economic, or psychological — constitutes “duress” and thus makes the contract, even if signed and executed, void and unenforceable.
Alternatively, imagine that you are in the hospital recovering from a serious illness when your doctor approaches you with a contract to sign. The doctor heard that you run a small restaurant and would like to enter into an agreement for the sale of goods to your restaurant. The circumstances are quite odd, clearly, and the doctor’s actions likely constitute “undue influence” given your vulnerable state. If you are put in a position of vulnerability where a person can exercise unreasonable pressure to get you to enter into the contract, then the contract is most likely unconscionable and therefore void and unenforceable under the law.