When Is a Contract of Adhesion Unconscionable?

Last updated on August 10, 2020

The bottom line for contract drafters relying on standard form agreements is to stop the escalation of legal tricks to deprive a vulnerable counterpart of basic fairness in the bargain. If unusual terms are to be used then the court will focus on whether there was real assent, that it was informed, and that genuine efforts are taken to explain and bring the consequences of unusual or onerous terms in standard form agreements to the attention of the party sought to be bound. Since the Courts may be expected to scrutinize standard form terms with equitable lenses, then contract drafters would be prudent to make sure that the approach that they take is not so one sided and harsh as to circumvent the reasonable expectations of the contracting party.

Martin Kratz provides a very insightful analysis on Slaw of the recent SCC decision Uber Technologies Inc. v. Heller 2020 SCC 16, regarding the enforceability of contracts of adhesion vis-a-vis unconscionability.