• Title/Summary/Keyword: procedural unconscionability

Search Result 3, Processing Time 0.017 seconds

The Validity of Consumer Arbitration Agreement - Focusing on U.S. Cases - (소비자 중재합의의 유효성 - 미국판례를 중심으로 -)

  • PARK, Eunok
    • THE INTERNATIONAL COMMERCE & LAW REVIEW
    • /
    • v.77
    • /
    • pp.43-67
    • /
    • 2018
  • Arbitration is one of alternative dispute resolution systems which settle a dispute by arbitrators(private persons) based on a contract between contracting parties without a judicial litigation system involved. As a valid arbitration agreement is an essential requirement for commencement of arbitration, the first thing to be determined is whether there is a valid arbitration agreement or not when a dispute is submitted. A consumer arbitration agreement usually exists as an arbitration clause in an adhesive contract between consumers and a seller. When consumers buy a product from a seller, they are requested to agree on a general terms and conditions which are unilaterally drafted by a seller in advance. These terms and conditions are not negotiable because it is an adhesive contract and consumers are placed in "take-it-or-leave-it" position. Therefore, even though there is an arbitration agreement between consumers and a seller, it has to be carefully considered whether it has a legal effect or not. In this respect, a court will examine if an arbitration agreement has procedural unconscionability and substantive unconscionability. Therefore, as U.S is a well-advanced and arbitration-friendly country, this paper analyzes four U.S cases to find out (i) what a court considers, (ii) how a court examines and interprets procedural and substantive unconscionability and (iii) if there has been a change in regard to a court's decision. By doing so, it will provide some suggestions and guidelines for a consumer arbitration in Korea.

  • PDF

Review of U.S. Courts' Procedural and Substantive Unconscionability Doctrine Regarding Mandatory Arbitration Agreement in the Nursing Home Contracts (미국 요양원 입소계약상의 강제적 중재 조항에 관한 미국 법원의 절차적, 실체적 비양심성 법리 고찰)

  • Shin, Seungnam
    • Journal of Arbitration Studies
    • /
    • v.31 no.1
    • /
    • pp.83-105
    • /
    • 2021
  • If aggrieving consumers or employees cannot prove both substantive and procedural unconscionability, many U.S. state courts will enforce arbitration agreements. Additionally, U.S. courts weigh a variety of factors to determine whether an arbitration agreement is substantively unconscionable. For example, U.S. courts have considered one or a combination of the following factors: (1) the fairness of contractual terms; (2) the severity of contractual terms' deviation from prevailing standards, customs, or practices within a particular industry; (3) the reasonableness of goods-and-services contract prices; (4) the commercial reasonableness of the contract terms; (5) the purpose and effect of the terms and (6) "the allocation of risks between the parties." Further, procedural unconscionability characterized by surprise or lack of knowledge focuses on terms that are deceptively hidden in a mass of contract language, the object of another concealment, or imposed in the circumstances involving haste or high-pressure tactics so that they are not likely to be read or understood. This unconscionability doctrine can be applied to a situation where an alcoholic dementia-afflicted older adult is admitted to a nursing home. At that time, because she had alcoholic dementia, which precluded her reading, comprehending, writing, negotiating, or signing of any legal document, her son, who did not understand the adhesion contract, signed the standardized residential contract and the arbitration agreement.

A Study on Unconscionability as an Exception to the Independence Principle under Bank Guarantees (은행보증의 독립성 예외와 "비양심성"에 관한 연구)

  • Jing-Ik Chae
    • Korea Trade Review
    • /
    • v.47 no.5
    • /
    • pp.115-128
    • /
    • 2022
  • This paper reviewed "unconscionability" as an exception to the independence principle of bank guarantees. Apart from fraud which has been recognized in most international jurisdictions, Uuconscionability would also be recognized as the exception to the legal principle, the so-called "fraud rule" or "an abuse of rights." Unconscionability exception is applied in the same manner as fraud and other exceptions to the principle of independence. The exception should allow guarantor to dishonor the drawings that abuse the independence principle. However, outright or manifest facts of the unconscionability must be established in order to apply the exception. Lots of arguments or conflicts may be caused in applying the unconscionability exception. Therefore, this study aims to prevent institutional abuses or to reduce the disputes from setting up the legitimate scope and standard for application of the exception by reviewing these procedural issues and problems under bank guarantee transactions. This paper also suggested practical implications and countermeasures for the institutional application.