An unreasonable contract is one that is grossly unfair, unjust, or dishonest. A court will not enforce such a contract if it shocks the conscience of a normal person. Competence, fairness, and honesty are factors considered in determining whether a contract is unreasonable. Courts aim to prevent one party from exploiting another and assess the fairness of contracts. Honesty is also considered, and a court will not enforce contracts that are so one-sided that an honest person would disagree about the benefits.
A grossly unfair, unfair or dishonest agreement can be considered an unreasonable contract. Determining whether or not an agreement is unreasonable usually raises questions of competence, fairness and honesty. If these things are found to have been manipulated in such a way that a deal is shocking to the conscience of a normal person, a court will not allow the contract to be enforced.
The inconceivability of a contract usually arises as a defense. When one party sues for breach of contract, the other party may claim that it failed to perform its obligations because it was an unreasonable contract. It’s important to understand that an agreement is unlikely to be deemed unreasonable simply because one party’s terms are unfavourable.
For a contract to be considered inconceivable, it must be grossly unfair or unjust. The terms and potential benefit of the contract should generally be shocking to the conscience of a normal person. Courts don’t review questionable contracts with the goal of teaching people to make better business decisions. The role of a court in determining whether a contract is inconceivable is to prevent one party from benefiting from the exploitation of another.
Competence is one of the factors usually considered in such a case. An inconceivable contract is one that a competent person would not enter into. When competence is taken into account, age is also commonly considered. An example would be a teenage singer signing a contract with a music executive who is unfairly pro-music company. A judge may find it to be an unreasonable contract due to the music executive’s knowledge and experience versus the singer’s youth and incompetence.
People usually have a great deal of freedom when it comes to concluding and drafting contracts. A court, however, may have the authority to assess the fairness of such contracts. The justice system is based on a high level of integrity. Allowing the justice system to be used to enforce agreements that are grossly unbalanced is generally not seen as serving the best interest of society.
Honesty is also considered when there are issues of reasonableness. A court generally does not allow one party to benefit from an agreement where the facts were intentionally and grossly misrepresented to another. Honesty is also considered with regards to the benefits to be received. Courts generally don’t enforce contracts so one-sided that an honest person would disagree about the benefits.
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