Many people, based on the intrinsic notion of fairness, believe that the law will not enforce a contract that is unreasonable. Unconscionability has been used as a theory to void contract provisions since the first courts of equity; however, since this theory’s incorporation into the Uniform Commercial Code (“U.C.C.”), it has taken a more prominent role in contract law. Unconscionability, however, does not have a clear definition, and scholars have noted that the application of unconscionability and the expectations of many people often do not align. Therefore, this Study seeks to investigate unconscionability and attempts to discover how the doctrine is applied and how claims of unconscionability are analyzed. Although prior studies have examined the doctrine of unconscionability, none are recent, and none have focused solely on North Carolina.
This Study examines the doctrine of unconscionability in North Carolina empirically through the use of court cases. The purpose of this Study is to observe the significance of preselected factors in the outcomes of cases. This Study first provides some key background information on unconscionability and describes the bifurcated analysis of procedural and substantive unconscionability, as recognized by the United States Supreme Court and adopted by North Carolina. Finally, this Study provides an analysis using the results of our survey of court decisions. The analysis is primarily focused on identifying what facts or factors are predictive of unconscionability decisions. Hopefully, this Study helps the reader better understand the practical treatment of unconscionability in North Carolina.
Ultimately, this Study shows that unconscionability is a contract theory that rarely prevails. This Study incorporates eighty-nine cases and shows that contract provisions were ruled sufficient to sustain a finding of unconscionability in a mere three cases. Procedural unconscionability was found in only six cases, while substantive unconscionability was found in only three cases. This Study also highlights the operative facts or factors present in the courts’ analyses and reveals statistical trends and common traits.
