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SOME CONTRACTS CAN BE CANCELLED

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Article 17-20

¡No Se Deje!

 

Contracts are used to ensure that people can legally enforce the terms of their agreements.  In our society, it is considered “FAIR” to require people or companies to deliver what they contracted to do.  Some contracts will not be allowed by the courts and will not be enforced.  Courts will not enforce contracts that deal with illegal obligations.  This includes private gambling debts where gambling is illegal, contracts for the sale of illegal substances such as drugs or illegal firearms, or contracts for illegal services such as prostitution where it is illegal.

 

Some contracts will not be allowed or enforced if they are extremely unfair to one of the parties.  These contacts are called “UNCONSCIONABLE” contracts.  Courts have refused to enforce contracts that are “unusually harsh and shocking to the conscience or so grossly unfair that the perpetrator cannot be allowed to benefit from it.”  The courts in these cases apply the judge’s sense of conscience and morality to determine if the contract terms are unconscionable and therefore unenforceable.  Courts have said that unconscionable contracts are those so unfair that no reasonable person would agree to it and no honest person would accept.

 

Courts consider many factors to determine if the contract is unconscionable.  They consider the respective bargaining power, age and mental capacities of the parties.  They consider whether fraud or deceit was used or if one party was misled or caused to misunderstand the terms or to sign under duress.  The abusive party will not be awarded the legal remedies the unconscionable contract provides.  In the case of the sale of a product for an excessive price, the victim will not be required to pay the price.  In a service contract, the victim will not be required to perform the service.

 

In the famous case of Williams vs. Walker Thomas Furniture Company, the court explained what an unconscionable contract is and why justice requires liberating the victim from its terms:

 

Ordinarily, one who signs an agreement without full knowledge of its terms might be held to assume the risk that he has entered a one-sided bargain. But when a party of little bargaining power, and hence little real choice, signs a commercially unreasonable contract with little or no knowledge of its terms, it is hardly likely that his consent, or even an objective manifestation of his consent, was ever given to all the terms. In such a case the usual rule that the terms of the agreement are not to be questioned should be abandoned and the court should consider whether the terms of the contract are so unfair that enforcement should be withheld.”

 

Many people assume that if they have signed a contract they must comply with its terms.  They assume that if it was written by the other party’s lawyers it must be legal and enforceable.  There are many defenses to contracts that can be used to change, limit, or cancel some or all of its terms.  It is always better to insist on time to have an attorney review a significant contact BEFORE it is signed.  If this was not done, even signed contracts can sometimes be cancelled if extremely unfair. ¡NO SE DEJE! ®

 

JESS J. ARAUJO, ESQ.