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Contracts II
University of Kansas School of Law
Drahozal, Christopher R.

Contracts II Outline

I. Unconscionability—if the court finds that the contract is unconscionable, it may relieve a party from its duty.
A. Procedural
1. interference with the process of assent
a. look to conduct of the parties
B. Substantive
1. Values exchanged are grossly disparate
C. Consumer Transactions
1. Warrant of Attorney
a. enforceable if expressly assented to
b. Unconscionable when included in fine print or Boilerplate
1) Boilerplate
a) assent to the Boilerplate is assent to anything that is NOT INDECENT
b) Duty of Reading is relaxed or excused
2. UCC § 2-302 authorizes a court to find, as a matter of law, that a contract or a clause thereof was unconscionable at the time it was made,
a. the court may refuse to enforce the contract,
b. excise the objectionable clause OR
c. limit the application of the clause to avoid an unconscionable result.
3. Burden of Proof
a. person who claims the contract is unconscionable
b. then shifts to the other party to show
1) commercial setting and reasonableness
2) reasons for the unconscionable provision
3) good faith
4. Adhesion Contracts
a. unconscionable only if claimant attempted to bargain for terms in the adhesion contract and was refused
D. Commercial Transactions
1. Hold Harmless clauses
a. Subjective determinations of a party’s assent is permitted if
b. in light of commercial background and needs of the trade
c. clauses are so one-sided
d. under the circumstances existing at the time the contra

a) Just because termination is permitted does not make it enforceable
b) Must comply with §2-302

II. Illegality—unenforceable if against public policy
A. §178—Private interest in enforcing the contract
1. justified expectations
a. benefits
2. forfeiture
a. Court will allow forfeiture if there is serious misconduct
3. special public interests
B. Public interest in non-enforcement of the contract
1. strength of the policy
a. Criminalized?
b. Expressed legislative intent
2. non-enforcement furthers the policy
a. protected classes
b. purpose of statute
3. deliberateness and seriousness
a. deliberateness
1) whether the party requires the aid of the illegal transaction to establish the case
2) purpose
b. Seriousness:
1) Malum in se—inherently wrong and evil
2) Malum prohibitum—not inherently evil but wrong
4. direct connection between misconduct and illegal term
C. Covenant not to Compete
1. Reasonable in terms of protecting interests
a. time
b. scope
c. geographic
2. Go no further than necessary to protect that interests
III. Performance of the Contract
A. Performance Overview
1. Assumption: Contract is Made
a. Issue: What are the terms and meanings
1) Defines the obligations of the parties
b. Breach
1) Is Performance Due?
c. Terms and Meanings: