Unconscionable agreement or term of contract

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§ 1-112. Unconscionable agreement or term of contract

(a) The court, upon finding as a matter of law that a contract or contract clause was unconscionable at the time the contract was made, may refuse to enforce the contract, enforce the remainder of the contract without the unconscionable clause or limit the application of any unconscionable clause in order to avoid an unconscionable result.

(b) Whenever it is claimed or appears to the court that a contract or any clause of the contract is or may be unconscionable, the parties, in order to aid the court in making the determination shall be afforded a reasonable opportunity to present evidence regarding:

(1) the commercial setting of the negotiations;

(2) whether a party has knowingly taken advantage of the inability of the other party to reasonably protect his or her interests because of physical or mental infirmity, illiteracy, inability to understand the language of the agreement or similar factors;

(3) the effect and purpose of the contract or clause; and

(4) in the case of a sale, any gross disparity at the time of contracting between the amount charged for the property and the value of the property measured by the price at which similar property was readily obtainable in similar transactions. Such a disparity does not of itself render the contract unconscionable. (Added 1997, No. 104 (Adj. Sess.), § 3, eff. Jan. 1, 1999.)


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