Misconduct and Mistake

Question 1

Unconscionability three definitions

Answer 1

1. William v. Walker, Abesnce of meaningful choice on the part of one of the parties together with contract terms which are unreasonably favorable to the other party.
2. UCC: The clauses involved are so one-sided as to be unconsciousable under the circumstances
3. Sliding scale: Between procedural and substantive unconscionability, a greater quantity of one type will justify a smaller quantity of the other type.

Question 2

Procedural Unfairness

Answer 2

1) Status: gross inequality
2) Behavior: over reaching and taking advantage.

Question 3

Status

Answer 3

Relationship between the parties, wealth, education level, knowledge of subject matter, absence of meaningful choice, or culture

Question 4

Behavior

Answer 4

Rushing/pressure to sign, No access to other advice or to a lawyer, fine print, Convoluted or hidden terms, long sentences, legalese, bury information

Question 5

Substantive unfairness

Answer 5

1. Shockingly one sided
   - disclaimer of liability for intentional torts
   - disclaimer of liability for gross negligence
   - Mandatory arbitration clauses
2. Shocks the conscience of the court
3. Extreme in light of commercial setting

Question 6

Williams v, Walker

Answer 6

It is a question of whether they should apply the UCC to the facts. If a contract be unreasonable and unconscionable, but not void for fraud, a court of law will give to the party who sues for its breach damages, not according to its letter, but only such as he is equitably entitled to.
.
Dissent: The court is not the proper place for remedy in predatory transactions.

Question 7

UCC 302

Answer 7

If a contract has 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 unconscionable clause or it may limit the application of any unconscionable clause as to avoid any unconscionable result.

Question 8

Elements

Answer 8

1. Contract or any clause unconscionable and
2. At the time of the contract
   then courts may:
   1) refuse to enforce it
   2) Enforce the remainder of the contract
   3) Limit clause application to avoid unconscionable result

Question 9

Brooklyn Union Gas v. Jimeniz

Answer 9

Man did not speak english and was held to terms he did not understand. He wanted to know the terms of the contract but never got the translation.

Question 10

A mistake defined

Answer 10

a mistake is a belief that is not in accord with the facts.
.
1. Not necessary to articulate mistake
2. Relates to facts as existed at K formation.
3. Can include law

Question 11

Mistake of fact
mistake of law
mistake of expression

Answer 11

Improvident act
Mistaken prediction about the future
Misunderstanding

Question 12

Framework of mistake of fact

Answer 12

1. Was there a mistake at time of contract?
2. Was it related to a basic assumption of K?
3. Does it have material impact on exchange?
4. Was it unilateral or mutual
5. Did adverse party bear the risk?
6. If unilateral, would enforcement be unconscionable or did other party have reason to know?

Question 13

Mutual mistake

Answer 13

Where a mistake of both parties at the time a contract was made as to a basic assumption on which the contra t was made has a material effect on the agreed exchange of performances, the contract is voidable by the adversely affected party.

Question 14

Bearing the risk (RST 154)

Answer 14

1) the risk is allocated by agreement
2) He is aware that he has only limited knowledge but treats his limited knowledge as sufficient
3) the risk is allocated by the court

Question 15

Bearing the risk elements

Answer 15

1. Affirmatively knowingly allocated
2. Conscious ignorance
3. Court allocated

Question 16

Unilateral mistake RST 153

Answer 16

A mistake of one aprty at the time a contract was made as to a basic assumption on which he made the contract has a material effect on the agreed exchange of performances that is adverse to him, the contract is voidable if he does not bear the risk of the mistake under the rule stated and
- the effect of the mistake is such that enforcement of the contract would unconscionable.
- the other party had reason to know of the mistake or his fault.