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This is an unofficial draft of Article 2B from April 15, 1998. For the current official version, see the University of Pennsylvania Law School (Official NCCUSL) site at http://www.law.upenn.edu/library/ulc/ulc.htm SECTION 2B-110. UNCONSCIONABLE CONTRACT OR CLAUSE. (a) If a court as a matter of law finds the contract or any clause of the contract to have been unconscionable at the time it was made the court may 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 any unconscionable clause as to avoid any unconscionable result. (b) When it is claimed or appears to the court that the contract or any clause thereof may be unconscionable the parties shall be afforded a reasonable opportunity to present evidence as to its commercial setting, purpose and effect to aid the court in making the determination. Uniform Law Source: Section 2-302; 2A-108. Conforms to 2-302.Definitional Cross Reference: "Contract": Section 2B-102. "Court": Section 2B-102. "Term": Section 1-201. Conference and Committee Action: 1. At the 1997 NCCUSL Annual Meeting, the Conference adopted a motion that the three transactional articles should follow a consistent "core" definition. Reporter's Note: 1. Current law and derivation. Article 2B follows current Article 2. Since many of the transactions covered by Article 2B are not now within the UCC, it thus expands the ability of courts to monitor transactions beyond the law that current governs. The intent is to adopt modern decisions on unconscionable contracts and terms. In addition, of course, courts should consider the nature of the subject matter and types of transactions covered by this Article in continuing to evolve concepts of what constitutes an unconscionable term. 2. Inducement. Article 2B does not allow a court to invalidate a contract or a term based on unconscionable inducement. Traditional theories of fraud, duress and the like continue to apply, but the inducement concept is law only in Article 2A, where it is limited to consumer leases. While it may have a proper role in that context, there is no case law developing or suggesting the contours or limits of the theory and its applicability to general transactional environments is not established. In this article, of course, many situations where inducement may be an issue are dealt with by the concept of manifesting assent and opportunity to review. Other situations fall within concepts of fraud in the inducement and the like in common law. |