Unconscionability Doctrine

Under unconscionability doctrine, a court may hold that a provision in a contract is unenforceable. There are two elements to the doctrine, traditionally labeled "procedural unconscionability" and "substantive unconscionability."

The rule: a contractual provision is unenforceable provided:

(1) Procedural unconscionability: there was a lack of meaningful free choice in the formation of the contract, and

(2) Substantive unconscionability: the provision is substantively unfair.

The labels "procedural unconscionability" and "substantive unconscionability" can be misleading. It is not true that there two kinds of unconscionability, each of which could be a ground for holding a provision unenforceable. There is only one unconscionability doctrine with two parts each of which is required for a finding of unconscionability.

Henningsen v. Bloomfield Motors, 161 A.2d 69 (N.J. 1960), illustrates unconscionability doctrine.