In popular media, there are often scenes where characters include wild contractual terms and call it binding just because the agreement was signed. But naturally, reality may not necessarily reflect what we see on television.

To be clear, we’re not talking about false terms or a scenario where a person didn’t see a line and was therefore tricked into signing a contract. We’re talking about signing a clearly inappropriate and/or unfair document.

Introducing Unconscionability

When a contractual term is so ridiculous and wild that no reasonable person in good conscience would agree to it, the term or the entire contract would be deemed unenforceable.

Like many of the factors considered in the legal sphere, the concept of unconscionability requires interpretation. The court will determine what is reasonable based on past precedents.

Case Study: Jones v Star Credit Corp (1969)

TLDR: Several welfare recipients agreed to pay $900 for a home freezer that was worth a maximum of $300 on the retail market.

Held: The agreement was deemed unconscionable, and the court also mentioned unequal bargaining power as a deciding factor in the case.

If you want to read about the classic lifeboat cannibalism case, click here. For a two-minute overview of gold, silver, and uranium markets, check it out here.