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I am reading a contract that is clearly one sided and demands a lot of rights on the recipient's end to be withdrawn for the sake of the lease agreement. The lending party also wants to negate a lot of responsibilities that are enforced by law such as safety for the receiving party.

I like to categorize this under bad morals and evil intent and would like to accuse the lending party of such. Although I just want to see some enactments or civil codes that protect citizens from expensive corporations abusing people through signed contracts.

The jurisdiction is California.

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  • Does this answer your question? What is a contract and what is required for them to be valid?
    – Nij
    Jul 14 at 2:40
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    The only thing I see close enough is the consideration outline and that it is different to morals and good intentions. The consideration section says that contracts do not have to be fair. I understand this only for situations such as when the lender wants to clear up some debt or that the recipient is actually the oppressor and has to compensate for some injustice he gave.
    – Esa
    Jul 14 at 2:44
  • This is not even close to a duplicate of the linked question, That is asking about the general elements of a contract, this is asking specifically about the "moral" nature of the agreement Jul 15 at 20:20
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There is no requirement that the terms of a contract be even-handed

The common law position is that parties are free to contract on whatever terms they like: if you agree to sell me your late model car for $1 that's a matter between the two of us.

The law allows you to make a bad bargain.

Unconscionability

There is an equitable doctrine that allows the court to refuse to enforce unconscionable contracts or terms.

The California Supreme Court has ruled that "the central idea (of the) unconscionability doctrine is concerned not with ‘a simple old-fashioned bad bargain "… but with terms that are 'unreasonably favorable to the more powerful party.'" In other words, courts will not enforce contracts that are "overly harsh," "unduly oppressive," or "so one-sided as to shock the conscience."

However, I would be extremely surprised if the terms you are upset about rising to the level of unconscionability.

The basic test of unconscionability, as expressed in official comment 1 to section 2-302, is:

whether, in the light of the general commercial background and the commercial needs of the particular trade or case, the clauses involved are so one-sided as to be unconscionable under the circumstances existing at the time of the making of the contract. . . .The principle is one of the prevention of oppression and unfair surprise. . . and not of disturbance of allocation of risks because of superior bargaining power.

They seem to be dealing with risk allocation and moving risks that are normally on the lender to the buyer or requiring the buyer to waive statutory rights and warranties - there is nothing illegal in that unless the law has a "no contracting out" provision. Some laws do and some laws don't. Some laws may not allow contracting out in consumer transactions but may allow them in business transactions.

You seem to be talking about some sort of equipment financing arrangement. As such, if you don't like the deal, there's a bank down the street with a different deal.

US law recognises that once there is a contract, the parties have to act in good faith to ensure each party gets the benefit of the bargain they made but there is no such requirement in negotiating that bargain. If you can use your economic strength to get a better deal, that's called capitalism.

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  • I didn't even read it after the title of your post. There are MANY sources showing unconsciouble whatever that terminates a contract due to it being one sided. There are many websites that explain if a contract is clearly unfair and one sided this means that a specific portion of the contract is rendered invalid if not all.
    – Esa
    Jul 14 at 21:22
  • I also understand that many lawyers give leniency and tell a little more of the truth depending on what category of law they are dealing with. My situation is a landlord-tenant situation. I did not state whether I am a landlord or a tenant, but my previous comment obviously gives it away.
    – Esa
    Jul 14 at 21:25
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    @Esa you don’t have to believe me. You have the right to continue to be wrong.
    – Dale M
    Jul 14 at 22:01
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    @Esa This answer is correct as a general matter of law . Simply being "one-sided" or "unfair is not usually enough to make a contract illegal. It may be a good reason not to enter into the contract inn the first place.. Jul 15 at 20:33
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    @Esa - all three answers are generally correct and I do not think any of the people trying to help by taking their time to answer are people who make money representing corporations. If you asked a new hypothetical question with specific details of the "immoral" terms you might get an answer with more detail that is also more helpful. And yes, contracts for slavery and contracts to commit crimes are invalid. Jul 16 at 0:44
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Ideally a contract is an agreement between parties who are both are getting something out of it. Why enter into a contract if i whatever you are getting is not worth whatever you ate giving up? That presumes there is no coercion and the parties are competent to understand what they are agreeing to.

There are situations where the relative power of the parties are so different that “unconscionable” terms are forced on one party. There is also the possibility of fraud if one party hides information from the other.

There is not likely to be any crime to propose a one sided agreement absent fraud.

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  • Could it be possible that a signed one sided agreement could be invalidated considering the expectations of the environment that the contract is based on should not occur during the contract term?
    – Esa
    Jul 14 at 3:41
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    You comment is way too vague to address. Jul 16 at 1:37
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People have broad freedom to choose contract terms

One should not enter into a contract unless one thinks that it will be better than making no deal at all, and is the best deal one can obtain.

When one party is in a stronger position, that party can and often does get the better of the deal, and this is perfectly legal. When one party has used very superior market power to get a deal that is excessively one-sided, a count may set it aside as "unconscionable" . There is no clear bright line for when a court will do this, but generally it is only done when the deal is far more one-sided than is normal in business between strangers. If one side has somehow taken advantage to a degree that nears coercion, a count is more likely to step in. A court is more likely to step in when the contract is for a consumer transaction.

There are various specific laws placing limits on contracts in particular fields of action, again particularly consumer contracts. In some cases these impose limits that may not be waived or contracted away. Courts will routinely enforce such laws. California probably has more such laws than many other US states.

Without kn owing the specific ways in which the contract in question is one-sided, there is no way to judge if it is a contract that a court would enforce as written or modify. But courts tend to be reluctant to modify contracts unless they are against specific laws, or there has been actual fraud, or such unfairness as to amount to the same thing as fraud or coercion. Merely being "morally wrong" generally has little effect.

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