How is an unconscionable contract defined?

An unconscionable contract is defined as one that is excessively one-sided, leading to an unfair advantage for one party over the other. This unfairness typically stems from unequal bargaining power, where one party may exploit the other due to a lack of understanding, coercion, or desperation. Such contracts are often scrutinized by courts, as they may be deemed unenforceable due to their inherent inequity.

For example, a situation where one party places significant pressure on another to accept unfavorable terms could result in an unconscionable agreement. Courts will evaluate the circumstances surrounding the formation of the contract, such as the relative sophistication of the parties involved and the circumstances under which the contract was signed, to determine if the terms are unconscionable.

The other responses describe characteristics of contracts that imply fairness, mutual benefit, or clarity, none of which align with the definition of unconscionability, which focuses on a distinct imbalance in bargaining power and fairness.