Nathalie Martin on Strategic Uses of the Unconscionability Doctrine Under UCC Section 2-302
The unconscionability doctrine is premised on the idea that the law should be fair and should not allow people to be taken advantage of. Unconscionability is used as a shield and not a sword, meaning that it is a defense to liability, not a cause of action for damages or other affirmative relief. While it clearly has its place in modern commerce, the doctrine is both vague and hard to establish. As a result, it should be asserted strategically. This commentary by Nathalie Martin is intended to help litigators determine the cases in which the defense is most likely to succeed. She writes:
The doctrine of unconscionability, codified in Section 2-302 of the U.C.C., permits courts to invalidate whole contracts, or particular provisions in contracts, they find fundamentally unfair. The section provides that:
If the court as a matter of law finds the contract or any clause in the contract to have been unconscionable at the time the contract was made the court can refuse to enforce the contract, or it may enforce the remainder of the contract, without the unconscionable clause, or it may so limit the application of nay unconscionable clause s to avoid any unconscionable result.
. . . .
Commentators have complained about the doctrine’s imprecision for years, and as a result, courts use the doctrine with considerable restraint. This means litigants must be realistic in using the doctrine, and also should be ready to be perceived as having a weak case, merely by asserting claims under Section 2-302. After all, Section 2-302 is designed not to be the primary tool for avoiding contract enforcement but rather to be a safety net to catch situations that fall outside the other mechanisms.
Contexts in which Section 2-302 has been successfully used are quite varied. In one case, a consumer purchased a windshield and the terms of the payment were misrepresented. In another case, after the purchase of faulty pipe, the court found a limitation on liability to replacement and exclusion of consequential damages unconscionable. The doctrine of unconscionability has successfully invalidated arbitration clauses in various contexts.
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