As a defense to the enforcement of a contract, a party can claim the affirmative defense that the agreement is “unconscionable.” The unconscionability defense requires that the party claiming it show that both the substance of the agreement is unreasonably favorable to a party and that the agreement was made procedure by which the parties entered the contract was entered into with an absence of meaningful choice. The recent case, SHEDDF2-FL3, LLC v. Penthouse S., LLC, 3D19-1100, 2020 WL 6472548 (Fla. 3d DCA Nov. 4, 2020), affirmed this dual requirement. Peter Mavrick is a Miami business litigation lawyer, and also represents clients in business litigation in Fort Lauderdale, Boca Raton, and Palm Beach. The Mavrick Law Firm represents clients in breach of contract litigation, non-compete agreement litigation, trade secret litigation, trademark infringement litigation, and other legal disputes in federal and state courts and in arbitration.
“Unconscionability is a common law doctrine that courts have used to prevent the enforcement of contractual provisions that are overreaches by one party to gain ‘an unjust and undeserved advantage which it would be inequitable to permit him to enforce.’” Basulto v. Hialeah Auto., 141 So. 3d 1145 (Fla. 2014). “Unconscionability has generally been recognized to include an absence of meaningful choice on the part of one of the parties together with contract terms which are unreasonably favorable to the other party.” Basulto v. Hialeah Auto., 141 So. 3d 1145 (Fla. 2014).
In business litigation, a party claiming that its contract is unconscionable has a heavy burden. When possible, courts will tend to enforce a parties’ agreement in accordance with its terms rather than allow a party to evade his or her contractual duties on the basis that the agreement is not fair. Conceptually, a party is in the best position to bargain for his or her rights. Accordingly, a court must find that a contract is both unfair in its substance as well as in the process of how it was agreed to. Florida Holdings III, LLC v. Duerst ex rel. Duerst, 198 So. 3d 834 (Fla. 2d DCA 2016) (“An agreement […] will be deemed unenforceable on grounds of unconscionability when it is both procedurally and substantively unconscionable”).