Unconscionability
United States

Under the Second Restatement of Contracts, a party may assert a claim for relief from unilateral mistake regarding the terms or conditions of a contract or a liquidated damages clause. Relief for unilateral mistake may be granted if the mistake would render enforcement of the contract unconscionable. The Restatement considers factors such as: 1) absence of reliance by the promisee; and 2) gross disparity in values exchanged. Despite the indication of these considerations, however, most challenges to liquidated damages clauses survive legal challenges based on unconscionability. The Restatement also has a separate provision on unconscionability at §208, "Unconscionable Contract or Term," which broadly allows a court to limit the application of an unconscionable term or contract in order to avoid an unconscionable result. Additionally, the concept as applied to sales of goods is codified in Section 2-302 of the Uniform Commercial Code.
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