What is an "unconscionable contract"?

An unconscionable contract refers to an agreement that is so one-sided or unfair that it shocks the conscience, leading to a determination that it should not be enforced. This typically occurs when one party has significantly more bargaining power than the other, resulting in terms that are overwhelmingly favorable to one side at the expense of the other. Courts may refuse to enforce such contracts because they are viewed as unjust or oppressive.

In practice, this means that if a court finds a contract unconscionable, it may either refuse to enforce the entire agreement or eliminate the unconscionable terms, thus protecting the party that was taken advantage of. This concept plays a crucial role in ensuring fairness in contractual relationships and maintaining the integrity of the legal framework surrounding agreements.