| | | Despite some recent developments to the contrary, courts do | | not often find contracts unenforceable for unconscionability. | | To determine whether to void a contract on this ground, courts | | examine a number of factors. These factors include: unequal | | bargaining power, whether the weaker party may opt out of | | arbitration, the clarity and conspicuousness of the | | arbitration clause, whether an unfair advantage is obtained, | | whether the arbitration clause is negotiable, whether the | | arbitration provision is boilerplate, whether the aggrieved | | party had a meaningful choice or was compelled to accept | | arbitration, whether the arbitration agreement is within the | | reasonable expectations of the weaker party, and whether the | | stronger party used deceptive tactics. See, e.g., We Care Hair | | Dev., Inc. v. Engen, 180 F.3d 838 (7th Cir. 1999); Harris v. | | Green Tree Fin. Corp., 183 F.3d 173 (3d Cir. 1999); Broemmer | | v. Abortion Serv. of Phoenix, Ltd., 173 Ariz. 148, 840 P.2d | | 1013 (1992); Chor v. Piper, Jaffray & Hopwood, Inc., 261 Mont. | | 143, 862 P.2d 26 (1993); Buraczynski v. Eyring, 919 S.W.2d 314 | | (Tenn. 1996); Sosa v. Paulos, 924 P.2d 357 (Utah 1996); Powers | | v. Dickson, Carlson & Campillo, 54 Cal. App. 4th 1102, 63 Cal. | | Rptr. 2d 261 (1997); Beldon Roofing & Remodeling Co. v. | | Tanner, 1997 WL 280482 (Tex. Ct. App. May 28, 1997). |
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| | | Despite these many factors, courts have been reluctant to find | | arbitration agreements unconscionable. II Macneil Treatise § | | 19.3; David S. Schwartz, Enforcing Small Print to Protect Big | | Business: Employee and Consumer Rights Claims in an Age of | | Compelled Arbitration, 1997 Wis. L. Rev. 33 (1997); Stephen J. | | Ware, Arbitration and Unconscionability After Doctor's | | Associates, Inc. v. Cassarotto, 31 Wake Forest L. Rev. 1001 | | (1996). However, in the last few years, some cases have gone | | the other way and courts have begun to scrutinize more closely | | the enforceability of arbitration agreements. Hooters of Am., | | Inc. v. Phillips, 173 F.3d 933 (4th Cir. 1999) (stating that | | one-sided arbitration agreement that takes away numerous | | substantive rights and remedies of employee under Title VII is | | so egregious as to constitute a complete default of employer's | | contractual obligation to draft arbitration rules in good | | faith); Shankle v. B-G Maint. Mgt., Inc., 163 F.3d 1230 (10th | | Cir. 1999) (finding that an arbitration clause does not apply | | to employee's discrimination claims where employee is required | | to pay portion of arbitrator's fee that is a prohibitive cost | | for him so as to substantially limit his use of arbitral | | forum); Randolph v. Green Tree Fin. Corp., 178 F.3d 1149 (11th | | Cir. 1999), cert. granted, 120 S.Ct. 1552, 146 L.Ed. 2d 458 | | (2000) (holding that consumer not required to arbitrate where | | arbitration clause is silent on subject of arbitration fees | | and costs due to risk that imposition of large fees and costs | | on consumer may defeat remedial purposes of Truth in Lending | | Act) [but cf. Dobbins v. | | Hawk's Enter., 198 F.3d 715 (8th Cir. 1999) (finding that | | before court can determine |
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