How is a contract deemed unconscionable?

A contract is deemed unconscionable when it is so unfair that no reasonable person would agree to its terms. This legal doctrine is aimed at ensuring justice and preventing oppression in contractual agreements. Unconscionability typically involves both procedural aspects (such as unfair or deceptive bargaining processes) and substantive elements (like overly harsh or one-sided terms). A court may determine that a contract is unconscionable if it exploits a significant imbalance in power between the parties, particularly if one party lacks an understanding of the terms due to complexity or other factors. Thus, the focus on extreme unfairness sets a clear threshold for what constitutes an unconscionable contract. This standard protects vulnerable parties by maintaining fairness and equity in contractual relationships, thus ensuring that agreements adhere to principles of justice.