Question

Useless Friend. Charles, who is very gullible, is friends with Bobby. Bobby, who cannot be trusted, decides to try to bind Charles to a contract in Bobby's favor. Bobby has Charles sign a contract promising to wash Bobby's car once a week for a month for $80. The contract incorporated by reference terms on the back. The terms on the back were in very small print and required Charles for one year to cook dinner for Bobby, do his laundry, and clean his apartment. Bobby is also very angry with his former girlfriend, Tessa, and decides to start rumors, that would constitute the tort of defamation, such as that she has a vile disease, cheated on tests, and stole from friends. Bobby wants to enlist the help of Charles but knows that Charles would be hesitant to assist in his endeavors. One evening, however, Charles drank too much beer and was clearly intoxicated - a fact apparent to Bobby. Bobby had him sign a contract agreeing to defame Tessa for $50. When he sobers up, Charles tells Bobby that he was drunk and that he has no intention of defaming Tessa, who also happens to be Charles's new girlfriend. He also finally takes a look at the contract involving work for Bobby and tells Bobby that the contract is outrageous and that he has no intentions of going through with any of it. Which of the following is true under the Restatement of Contracts, Section 16, regarding Charles's claim that he should be able to avoid the contract involving Tessa because he was intoxicated?

Answer 1

Substantive Unconscionability is the correct answer.

Regarding the unconscionable contract, the Supreme Court states that "no man in his senses and not under delusion would make on the one hand, and as no honest and fair man would accept on the other". The Substantive Unconscionability doctrine allows the court to refuse to reinforce a contract when this contract appears to be unfair. In fact, Charles's intoxication makes the terms of this contract one-sided and unjust.