Unconscionability

Further, Garner argues that Section 5 is unconscionable, and, therefore, that it *Page 408 should be rescinded or that this Court should refuse to enforce it. Initially, we note that Garner failed to make this argument at the trial level; nevertheless, we will address it. While it is true that a court may rescind a contract, or a portion of a contract, for unconscionability, "[r]escission of a contract for unconscionability is an extraordinary remedy usually reserved for the protection of the unsophisticated and uneducated." Marshall v. Mercury Finance Co. , 550 So.2d 1026 , 1028 (Ala.Civ.App. 1989), quoting E W Building Material Co. v. American Savings Loan Ass'n , 648 F. Supp. 289 , 291 (M.D.Ala. 1986); and see Wilson v. World Omni Leasing, Inc. , 540 So.2d 713 (Ala. 1989). An unconscionable contract or contractual provision is defined as a contract or provision "such as no man in his sense and not under delusion would make on the one hand, and as no honest and fair man would accept on the other." Lloyd v. Service Corp. of Alabama , 453 So.2d 735 , 739 (Ala. 1984), quoting Hume v. United States , 132 U.S. 406 , 410 , 10 S.Ct. 134 , 136 , 33 L.Ed. 393 (1889). Although Alabama law lacks an explicit standard for determining whether a contract or contractual provision is unconscionable, case law reveals that four factors are important in making this determination. In addition to finding that one party was unsophisticated and/or uneducated, a court should ask (1) whether there was an absence of meaningful choice on one party's part, (2) whether the contractual terms are unreasonably favorable to one party, (3) whether there was unequal bargaining power among the parties, and (4) whether there were oppressive, one-sided, or patently unfair terms in the contract.

This Court has also recognized a distinction between "substantive unconscionability" and "procedural unconscionability" and categorized the above factors as either substantive or procedural. Substantive unconscionability "`relates to the substantive contract terms themselves and whether those terms are unreasonably favorable to the more powerful party, such as terms that impair the integrity of the bargaining process or otherwise contravene the public interest or public policy; terms (usually of an adhesion or boilerplate nature) that attempt to alter in an impermissible manner fundamental duties *Page 1087 otherwise imposed by the law, fine-print terms or provisions that seek to negate the reasonable expectations of the non-drafting party, or unreasonably and unexpectedly harsh terms having to do with price or other central aspects of the transaction.'" Ex parte Thicklin , 824 So.2d 723 , 731 (Ala. 2002) (emphasis omitted) (quoting Ex parte Foster , 758 So.2d 516 , 520 n. 4 (Ala. 1999), quoting in turn 8 Richard A. Lord, Williston on Contracts § 18:10 (4th ed. 1998)). See also Leeman v. Cook's Pest Control, Inc. , 902 So.2d 641 (Ala. 2004). Procedural unconscionability, on the other hand, "deals with `procedural deficiencies in the contract formation process, such as deception or a refusal to bargain over contract terms, today often analyzed in terms of whether the imposed-upon party had meaningful choice about whether and how to enter into the transaction.'" Thicklin , 824 So.2d at 731 (quoting Foster , 758 So.2d at 520 n. 4, quoting in turn 8 Williston on Contracts § 18:10). To avoid an arbitration provision on the ground of unconscionability, the party objecting to arbitration must show both procedural and substantive unconscionability.

Instead, unconscionability is an affirmative defense, and the party asserting the defense bears the burden of proving unconscionability. Conseco Fin. v. Murphy , 841 So.2d 1241 , 1245 (Ala. 2002).

We conclude that Rigas did not meet her burden of showing that the arbitration provision included in the Plan is unenforceable or inapplicable. The arbitration provision is neither substantively nor procedurally unconscionable; arbitration of Rigas's claims is not precluded by the language of the arbitration provision indicating that the arbitration will be conducted under certain rules of the AAA; and Blue Cross did not waive its right to arbitration. Thus, the trial court erred in denying Blue Cross's motion to compel arbitration. We therefore reverse the trial court's order denying Blue Cross's motion to compel arbitration and remand this case for the trial court to enter an order granting Blue Cross's motion to compel arbitration. REVERSED AND REMANDED WITH DIRECTIONS.

(1) If the court as a matter of law finds the contract or any clause of the contract to have been unconscionable at the time it was made the court may refuse to enforce the contract, or it may enforce the remainder of the contract without the unconscionable clause, or it may so limit the application of any unconscionable clause as to avoid any unconscionable result. (2) When it is claimed or appears to the court that the contract or any clause thereof may be unconscionable, the parties shall be afforded a reasonable opportunity to present evidence as to its commercial setting, purpose and effect to aid the court in making the determination.

The record indicates that Garner was a sophisticated businessman with experience in the cable television franchise area and with knowledge of business finance and management. Further, the record does not indicate that when he executed the guaranty agreement Garner lacked meaningful choice or that he had unequal bargaining power. Nor can we say that Section 5 is unreasonably favorable to one party or that it is one-sided, oppressive, or patently unfair. In short, Section 5 is not unconscionable.

Based on the foregoing, the judgment entered in favor of Garner against the Laynes is reversed, and the cause is remanded to the trial court with instructions to dismiss the claim for contribution. Again, we emphasize that Garner is free to sue the Laynes under the express terms of the guaranty agreement when the debt has been fully paid and discharged. The judgments entered in favor of Garner against the Laynes on their counterclaim and the judgment entered in favor of the Moseses against the Laynes on their third-party complaint are affirmed. AFFIRMED IN PART; REVERSED IN PART; AND REMANDED WITH INSTRUCTIONS.

If the court as a matter of law finds the contract or a clause of the contract was unconscionable at the time it was made, the court may refuse to enforce the contract, enforce the remainder of the contract without the unconscionable clause, or so limit the application of an unconscionable clause as to avoid an unconscionable result.

If it is claimed or appears to the court that the contract or any clause of the contract may be unconscionable, the parties shall be given a reasonable opportunity to present evidence as to its commercial setting, purpose, and effect to aid the court in making the determination.

For these reasons, we hold the superior court erred in ruling that it would be conscionable to enforce the warranty's bar against consequential damages and in declining to allow the Pierces to present their consequential damages claim to the jury.

This approach is consistent with U.C.C. § 2-302, as codified in Alaska under AS 45.02.302, which states: (a) If the court as a matter of law finds the contract or a clause of the contract unconscionable at the time it was made, the court may refuse to enforce the contract, enforce the remainder of the contract without the unconscionable clause, or so limit the application of an unconscionable clause as to avoid an unconscionable result.

We agree with Catalina that unconsciona-bility under AS 45.02.719(c) ultimately presents an issue of law for the court, rather than one of fact for the jury.

We agree, holding that because Catalina acted in bad faith when it breached the warranty, the company cannot conscionably enforce the warranty's provision barring consequential damages. Accordingly, we remand for a trial to determine consequential damages.

But the decisive factor in this case is the nature of Catalina's breach, which caused the limited remedy to fail of its essential purpose. The jury specifically found that Catalina acted in bad faith in failing to honor its warranty. This finding virtually establishes a "cireumstance[ ] resulting in failure of performance that makes it unconscionable to enforce the parties' allocation of risk.

Upon finding as a matter of law that a contract or contract clause was unconscionable at the time the contract was made, a court may refuse to enforce the contract, may enforce the remainder of the contract without the unconscionable clause, or may limit the application of the unconscionable clause in order to avoid an unconscionable result.

Whenever it is claimed or appears to the court that a contract or a contract clause is or may be unconscionable, the parties, in order to aid the court in making the determination, must be afforded a reasonable opportunity to present evidence as to (1) the commercial setting of the negotiations; (2) whether a party has knowingly taken advantage of the inability of another party reasonably to protect personal interests by reason of physical or mental infirmity, illiteracy, inability to understand the language of the agreement, or similar factors; (3) the effect and purpose of the contract or clause; and (4) any gross disparity, if a sale, at the time of contracting, between the amount charged for the property and the value of the property measured by the price at which similar property was readily obtainable in similar transactions. A disparity between the contract price and the value of the property measured by the price at which similar property was readily obtainable in similar transactions does not, of itself, render the contract unconscionable.

With respect to a consumer lease, if the court as a matter of law finds that a lease contract or a clause of a lease contract has been induced by unconscionable conduct or that unconscionable conduct has occurred in the collection of a claim arising from a lease contract, the court may grant appropriate relief.

(a) If the court as a matter of law finds the contract or any clause of the contract to have been unconscionable at the time it was made the court may refuse to enforce the contract, or it may enforce the remainder of the contract without the unconscionable clause, or it may so limit the application of any unconscionable clause as to avoid any unconscionable result. (b) When it is claimed or appears to the court that the contract or any clause thereof may be unconscionable the parties shall be afforded a reasonable opportunity to present evidence as to its commercial setting, purpose, and effect to aid the court in making the determination.

In particular, the standard for substantive unconscionability—the requisite degree of unfairness beyond merely a bad bargain—must be as rigorous and demanding for arbitration clauses as for any contract clause.

A party cannot avoid a contractual obligation merely by complaining that the deal, in retrospect, was unfair or a bad bargain. Not all one-sided contract provisions are unconscionable; hence the various intensifiers in our formulations: “overly harsh,” “unduly oppressive,” “unreasonably favorable.”

The ultimate issue in every case is whether the terms of the contract are sufficiently unfair, in view of all relevant circumstances, that a court should withhold enforcement. Moreover, our unconscionability standard is, as it must be, the same for arbitration and nonarbitration agreements.

To aid understanding of the issues in this case, we begin by discussing general principles of unconscionability. “ ‘One common formulation of unconscionability is that it refers to “ ‘an absence of meaningful choice on the part of one of the parties together with contract terms which are unreasonably favorable to the other party.’ ” [Citation.] As that formulation implicitly recognizes, the doctrine of unconscionability has both a procedural and a substantive element, the former focusing on oppression or surprise due to unequal bargaining power, the latter on overly harsh or one-sided results.’ ” (Sonic II, supra, 57 Cal.4th at p. 1133.) “ ‘The prevailing view is that [procedural and substantive unconscionability] must both be present in order for a court to exercise its discretion to refuse to enforce a contract or clause under the doctrine of unconscionability.’ [Citation.] But they need not be present in the same degree. ‘Essentially a sliding scale is invoked which disregards the regularity of the procedural process of the contract formation, that creates the terms, in proportion to the greater harshness or unreasonableness of the substantive terms themselves.’ [Citations.] In other words, the more substantively oppressive the contract term, the less evidence of procedural unconscionability is required to come to the conclusion that the term is unenforceable, and vice versa.” (Armendariz v. Foundation Health Psychare Services, Inc. (2000) 24 Cal.4th 83, 114 [ 99 Cal.Rptr.2d 745 , 6 P.3d 669 ] (Armendariz).)

In the present case, we hold that Concepcion requires enforcement of the class waiver but does not limit the unconscionability rules applicable to other provisions of the arbitration agreement. Applying those rules, we agree with Valencia that the Court of Appeal erred as a matter of state law in finding the agreement unconscionable. Accordingly, we reverse the judgment below.

The California Legislature did not adopt Uniform Commercial Code section 2302. That section invalidated as a matter of law provisions found by the court to be “unconscionable.”

“As Official Comment 1 to § 2-302 of the Uniform Commercial Code suggests, [t]he basic test 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. Hamm v. Taylor, supra, 495-96 .” (Internal quotation marks omitted.) Texaco, Inc. v. Golart, supra, 462 .

The determination of unconscionability is to be made on a case-by-case basis, taking into account all of the relevant facts and circumstances. Id. Applying this test to the underlying facts found by the trial court, we conclude that the defendants have not established that the mortgage transactions in question were either procedurally or substantively unconscionable.

Substantive unconscionability focuses on the “content of the contract,” as distinguished from procedural unconscionability, which focuses on the “process by which the allegedly offensive terms found their way into the agreement.” J. Calamari & J. Perillo, Contracts (3d Ed.) § 9-37.

Were the defendants’ arguments *90 based upon favorable factual findings, they might well have prevailed on appeal. Their assertions, however, are contrary to the facts found by the trial court.

The defendants argue that because of their illiteracy in English and their lack of business acumen, the terms of the mortgages unfairly surprised them and that, therefore, there was a “lack of voluntariness” in the transactions. The defendants bolster this claim by the fact that they were unrepresented by counsel in both loan transactions. They contend, moreover, that they did not know that they would have to pay off the prior liens on their home in order to obtain the November, 1987 mortgage loan.

The court further found that the defendants were “intelligent and energetic” persons, and that, having lived in the mainland United States for more than twenty years, they understood its judicial, “legal and financial systems.” Finally, the court found that the defendants defaulted on the mortgage, not because they did not understand their obligations thereunder or because their income while living together was insufficient to support the mortgage payments, but because the breakdown of their marriage subsequent to the mortgage closing impaired their financial situation.

After the November, 1987 loan, the defendants were burdened with $806 in monthly mortgage payments, consisting of $407 to People’s Bank and $399 to the plaintiff. That sum represented 67 percent of their $1195 monthly income listed on the loan application.

Thus, although in a case where the court has found an intentional reaping of equity a mortgagor might prevail on a claim of unconscionability, this record does not compel such an inference.

On the basis of those findings and the record, we cannot conclude that this transaction was procedurally unconscionable as a matter of law.

This claim is based on the defendants’ contention that they had only the $1195 in monthly income listed on the loan application form with which to pay the $1098 monthly mortgage payments due for the first and second mortgages. Thus, the defendants argue, they were left with only $97 per month for living expenses after *92 the mortgage payments.

With respect to the judgment on the defendants’ counterclaims based upon TILA, CUTPA and § 36-224l, the judgment of the trial court is reversed, and the remedies are to be determined upon the remand. The judgment is reversed and the case is remanded for further proceedings in accordance with this opinion.

(1) If the court as a matter of law finds the contract or any clause of the contract to have been unconscionable at the time it was made the court may refuse to enforce the contract, or it may enforce the remainder of the contract without the unconscionable clause, or it may so limit the application of any unconscionable clause as to avoid any unconscionable result.

In order to hold Atlantic’s renewal demand “unjust”, it must be found to be unfair or unconscionable; that is to say, there must be an absence of meaningful choice and contract terms unreasonably favorable to one of the parties. Superior bargaining power alone without the element of unreasonableness does not permit a finding of unconscionability or unfairness. The traditional test is this: a contract is unconscionable if it is “such as no man in his senses and not under delusion would make on the one hand, and as no honest or fair man would accept, on the other.” Williams v. Walker-Thomas Furniture Co., 121 U.S.App.D.C. 315, 320 , 350 F.2d 445, 450 , 18 A.L.R.3d 1297, 1301-3 (1965). “It is generally held that the unconscionability test involves the question of whether the provision amounts to the taking of an unfair advantage by one party over the other.” J. A. Jones Construction Co. v. City of Dover, Del.Super., 372 A.2d 540, 552 (1977), appeal dismissed, Del.Supr., 377 A.2d 1 (1977). The business-practices-of-the-community test asks whether the terms are so extreme as to appear unconscionable according to the mores and business practices of the time and place. Applying this test, it was held in Gordon v. Crown Central Petroleum Corp., N.D.Ga., 423 F.Supp. 58, 61-62 (1976), aff’d, 5th Cir., 564 F.2d 413 (1977) that the termination of a gas station dealership by Crown, because the dealer refused to stay open 24 hours per day, was not unconscionable in that such a requirement was “not atypical in the local business community.” Applying such normative test, the proffered addendum is not unconscionable; every dealer except Tulowitzki has accepted it.

Unconscionability is a concept that is used sparingly.5 Traditionally, an unconscionable contract is one which “no man in his senses and not under delusion would make on the one hand, and as no honest or fair man would accept, on the other.”6 “But mere disparity between the bargaining powers of parties to a contract will not support a finding of unconscionability.”7 “[T]here must be an absence of meaningful choice and contract terms unreasonably favorable to one of the parties.”8

There is no deprivation of meaningful choice if a party can walk away from the contract.9 Here, DeShaun was free to accept the Planet Fitness membership or not. The Superior Court did not err in concluding that the release is not unconscionable.

(2) When it is claimed or appears to the court that the contract or any clause thereof may be unconscionable the parties shall be afforded a reasonable opportunity to present evidence as to its commercial setting, purpose and effect to aid the court in making the determination.

In summary, Tulowitzki has failed to carry his burden of demonstrating that “the terms of the agreement bear no reasonable relation to the business risks involved and are so one-sided as to be oppressive.” W. L. May Co. v. Philco-Ford Corp., 543 P.2d at 287 . Thus, there is no basis for finding that the requirement that plaintiff sign the vapor recovery agreement in order to renew his service station lease operated to terminate his franchise without just cause. We hold, therefore, that under the totality of circumstances, there is no “unjust termination” or “failure to renew without good cause” in this case. ****** Affirmed.

In 2010, DeShaun joined Planet Fitness at a cost of $10 per month.1 DeShaun signed a membership agreement, which contained the following: I understand and expressly agree that my use of this Planet Fitness facility . . . involves the risk of injury to me or my guest whether caused by me or not. I understand that these risks can range from minor injuries to major injuries including death. In consideration of my participation in the activities and use of the facilities offered by Planet Fitness, I understand and voluntarily 1 Devana Fitness, LLC was the franchisee of the Planet Fitness location on the date the Membership Agreement was executed. On July 31, 2012, prior to Ketler’s incident, Devana Fitness, LLC assigned its rights and interests in, and under, all Membership Agreements to PFPA, LLC. 1 accept this risk and agree that Planet Fitness . . . will not be liable for any injury, including, without limitation, personal, bodily, or mental injury. . . resulting from the negligence of Planet Fitness or anyone on Planet Fitness’ behalf whether related to exercise or not.

(1) Unless the context otherwise requires, and except as provided in subsection (3), this Article applies to transactions in goods and, in the case of a hybrid transaction, it applies to the extent provided in subsection (2).

In the instant case, Tulowitzki has not sustained his burden of showing that the tendered addendum bears “no reasonable relation to the business risks involved,” nor has he shown that the terms are “so one-sided as to be oppressive”.

“An unsupported conclusory allegation . that a contract is unenforceable as unconscionable is not enough. Sufficient facts surrounding the ‘commercial setting, purpose and effect’ of a contract at the time it was made should be alleged so that the court may form a judgment as to the existence of a valid claim of uncon-scionability . . . .”

However, we conclude that while both elements must be present, they need not be present to the same degree. This balancing, or sliding scale, approach, which we adopt, is considered to be the prevailing view in Florida: The prevailing view is that [procedural and substantive unconscionability] must both be present in order for a court to exercise its discretion to refuse to enforce a contract or clause under the doctrine of unconscionability. But they need not be present in the same degree. Essentially a sliding scale is invoked which disregards the regularity of the procedural process of the contract formation, that creates the terms, in proportion to the greater harshness or unreasonableness of the substantive terms themselves. In other words, the more substantively oppressive the contract term, the less evidence of procedural unconscionability is required to come to the conclusion that the term is unenforceable, and vice versa.

We agree with our district courts of appeal that procedural and substantive unconscionability must be established to avoid enforcement of the terms within an arbitration agreement.

Other Florida courts, reject the balancing, or sliding scale, approach and assess procedural and substantive elements independently, concluding the analysis if either element is lacking. See, e.g., Nat’l Fin. Servs., LLC v. Mahan, 19 So. 3d 1134, 1136 (Fla. 3d DCA 2009) (“Because the arbitration provisions in this case suffered from no procedural malady, we do not reach the question of substantive unconscionability.”) abrogated on other grounds by Shotts v. Op Winter Haven, Inc., 86 So. 3d 456 (Fla. 2011); Bland, 927 So. 2d at 257 (“This court, however, eschews the ‘sliding scale’ approach. Rather we assess procedural unconscionability and substantive unconscionability independently.”). - 25 - We conclude that the better approach—more in keeping with the pronouncement of this Court on unconscionability over eighty years ago in Peacock Hotel—is the balancing, or sliding scale, approach.

(1) If the court as a matter of law finds the contract or any clause of the contract to have been unconscionable at the time it was made the court may refuse to enforce the contract, or it may enforce the remainder of the contract without the unconscionable clause, or it may so limit the application of any unconscionable clause as to avoid any unconscionable result.

(2) When it is claimed or appears to the court that the contract or any clause thereof may be unconscionable the parties shall be afforded a reasonable opportunity to present evidence as to its commercial setting, purpose and effect to aid the court in making the determination.

5. The Third District’s discussion about the Florida Deceptive and Unfair Trade Practices Act (FDUTPA), see ch. 501, Fla. Stat. (2004), was part of its analysis of the Clause. Basulto, 22 So. 3d at 588, 591-92. We have determined that the defenses to contract enforcement analysis, including unconscionability, should not have been applied in the appeal below. Accordingly, we find no need to discuss the issue of whether the purported arbitration agreements are contrary to the public policy embodied in FDUTPA.

III. CONCLUSION We quash the Third District’s decision on review because it conflicts with our controlling precedent set forth in Seifert. Accordingly, we remand this cause to the Third District with instructions to order the full restoration of the circuit court’s March 8, 2007, nonfinal order. Upon reinstatement of its order that was the subject of this review, the trial court should appropriately address our decision that the buyers be awarded reasonable appellate attorney’s fees. It is so ordered. PARIENTE, LEWIS, QUINCE, and LABARGA, JJ., concur. POLSTON, C.J., dissents with an opinion in which CANADY, J., concurs.

Unless the context otherwise requires, this chapter applies to transactions in goods; it does not apply to any transaction which although in the form of an unconditional contract to sell or present sale is intended to operate only as a security transaction nor does this chapter impair or repeal any statute regulating sales to consumers, farmers or other specified classes of buyers.

If the court as a matter of law finds the contract or any clause of the contract to have been unconscionable at the time it was made the court may refuse to enforce the contract, or it may enforce the remainder of the contract without the unconscionable clause, or it may so limit the application of any unconscionable clause as to avoid any unconscionable result.

When it is claimed or appears to the court that the contract or any clause thereof may be unconscionable the parties shall be afforded a reasonable opportunity to present evidence as to its commercial setting, purpose and effect to aid the court in making the determination.

Substantive unconscionability asks whether, at the time the contract was executed, and in light of the general background and commercial needs of a particular case, the clause is so one-sided as to oppress or unfairly surprise one of the parties. I.C. § 28-2-302(2); Smith, 114 Idaho at 684 , 760 P.2d at 23 . The commercial setting, purpose, and effect of the clause are relevant in determining whether a contract is unconscionable. I.C. § 28-2-302(2).

The element of unfair surprise exists because of the ambiguity of the limitation of liability provision. A reasonable purchaser could interpret the provision not to limit the recovery of damages like those to Walker’s potato crops. Therefore, we conclude that the limitation of liability provision is substantively unconscionable because it constitutes unfair surprise.

Comment 1 to the official text of I.C. § 28-2-302 states, in part: This section is intended to allow the court to pass directly on the unconscionability of the contract or particular clause therein and to make a conclusion of law as to its unconscionability.

The fact that Cyanamid had superior knowledge concerning ASSERT and made representations concerning its safety coupled with the fact that the label is ambiguous and with the lack of Walker’s bargaining power to negotiate concerning the limitation of liability lead us to conclude that the limitation of liability provision is procedurally unconscionable.

In 1988, 1989, and 1990, Walker Farms (Walker) purchased an herbicide, ASSERT, manufactured by American Cyanamid Company (Cyanamid) to use on fields where Walker grew grain and potatoes in rotation.

Consequential damages may be limited or excluded unless the limitation or exclusion is unconscionable. Limitation of consequential damages for injury to the person in the case of consumer goods is prima facie unconscionable but limitation of damages where the loss is commercial is not.

Therefore, Walker’s claims for breach of the express warranty satisfy the “commercial transaction” requirement. Because Walker has prevailed in this appeal, we also award Walker attorney fees on appeal pursuant to I.C. § 12-120(3).

Sec. 2-302. Unconscionable contract or clause. (1) If the court as a matter of law finds the contract or any clause of the contract to have been unconscionable at the time it was made the court may refuse to enforce the contract, or it may enforce the remainder of the contract without the unconscionable clause, or it may so limit the application of any unconscionable clause as to avoid any unconscionable result.

Subsequent to the appellate court’s ruling in the present case, this court decided the case of Razor v. Hyundai Motor America, 222 Ill. 2d 75 (2006), in which we rejected the requirement that both procedural and substantive unconscionability must be found before a contract or a contract provision will be found to be unenforceable. A finding of unconscionability may be based on either procedural or substantive unconscionability, or a combination of both.

Procedural unconscionability refers to a situation where a term is so difficult to find, read, or understand that the plaintiff cannot fairly be said to have been aware he was agreeing to it, and also takes into account a lack of bargaining power. Frank's Maintenance, 86 Ill.App.3d at 989 , 42 Ill.Dec. 25 , 408 N.E.2d 403 . Substantive unconscionability refers to those terms which are inordinately one-sided in one party's favor.

In sum, we hold that under the circumstances of this case, the waiver on class actions is unconscionable. It is not unconscionable merely because it is contained in an arbitration clause. It is unconscionable because it is contained in a contract of adhesion that fails to inform the customer of the cost to her of arbitration, and that does not provide a cost-effective mechanism for individual customers to obtain a remedy for the specific injury alleged in either a judicial or an arbitral forum. We further hold that the offending clause is severable from the arbitration clause. We dó not hold that class action waivers are per se unconscionable.

The unconscionability of class action waivers must be determined on a case-by-case basis, considering the totality of the circumstances. For the foregoing reasons, we affirm the judgment of the appellate court, which reversed the judgment of the circuit court, and remanded the cause to the trial court for further proceedings. Appellate court judgment affirmed.

(2) When it is claimed or appears to the court that the contract or any clause thereof may be unconscionable the parties shall be afforded a reasonable opportunity to present evidence as to its commercial setting, purpose and effect to aid the court in making the determination.

If the court as a matter of law finds the contract or any clause of the contract to have been unconscionable at the time it was made the court may refuse to enforce the contract, or it may enforce the remainder of the contract without the unconscionable clause, or it may so limit the application of any unconscionable clause as to avoid any unconscionable result.

When it is claimed or appears to the court that the contract or any clause thereof may be unconscionable the parties shall be afforded a reasonable opportunity to present evidence as to its commercial setting, purpose and effect to aid the court in making the determination.

We have said that a court considering a claim of unconscionability should examine the factors of assent, unfair surprise, notice, disparity of bargaining power, and substantive unfairness.

We believe that the issue of whether a given contract is one of adhesion is in the nature of a threshold issue relevant to the question of applicability of the unconscionability doctrine.

Clearly a finding that a contract is adhesive does not require a determination of unconscionability. It merely alerts the court that the situation is one in which such a finding may be justified.

Consideration of these factors leads us to conclude that paragraph 17 is not unconscionable in this case.

In regard to disparity of bargaining power, there is no dispute that defendants were in no position to bargain with plaintiff regarding the due-on-sale clause. Moreover, because the due-on-sale clause is a standard mortgage provision, it is almost certain that defendants could not have fared any better on that score with another lender. However, even though the mortgage can be characterized as a contract of adhesion with respect to paragraph 17, this does not mean paragraph 17 is automatically unconscionable.

In view of the widespread use of due-on-sale clauses and the fact that their use by federal saving and loan associations is specifically authorized by the federal government, see 12 CFR § 545.8-3 (f) (1982), we conclude paragraph 17 is well outside the reach of this statement of the unconscionability doctrine.

More is required to complete the case for unconscionability, and we are not satisfied that the case has been made here.

We have also stated that a bargain is unconscionable if it is such as no person in *620 his or her senses and not under delusion would make on the one hand, and as no honest and fair person would accept on the other.

With regard to assent, defendants point out that because they did not read the mortgage before signing it, they cannot be said to have actually assented to paragraph 17. This is true, but does not end our inquiry.

It is true that plaintiff did not give defendants specific notice that the mortgage contained a due-on-sale clause. But on this record we are unwilling to impose upon plaintiff the quasi-fiduciary duty of giving notice to defendants of every provision in the mortgage that might eventually prove disadvantageous to them. Our conclusion might be different had plaintiff stated or implied that there was no due-on-sale clause in the mortgage, or if defendants had not been afforded a fair opportunity to read it and consult an attorney about it.

With respect to a transaction that is, gives rise to, or leads the debtor to believe it will give rise to a consumer credit transaction, in an action other than a class action, if the court as a matter of law finds the agreement or transaction to have been unconscionable at the time it was made, or to have been induced by unconscionable conduct, the court may refuse to enforce the agreement, or if the court finds any term or part of the agreement or transaction to have been unconscionable at the time it was made, the court may refuse to enforce the agreement, or may enforce the remainder of the agreement without the unconscionable term or part, or may so limit the application of any unconscionable term or part as to avoid any unconscionable result.

For the purpose of this section, a charge or practice expressly permitted by this chapter is not in itself unconscionable.

If the court as a matter of law finds the contract or any clause of the contract to have been unconscionable at the time it was made the court may refuse to enforce the contract, or it may enforce the remainder of the contract without the unconscionable clause, or it may so limit the application of any unconscionable clause as to avoid any unconscionable result.

When it is claimed or appears to the court that the contract or any clause thereof may be unconscionable the parties shall be afforded a reasonable opportunity to present evidence as to its commercial setting, purpose and effect to aid the court in making the determination.

No supplier shall engage in any unconscionable act or practice in connection with a consumer transaction. An unconscionable act or practice violates this act whether it occurs before, during or after the transaction.

The unconscionability of an act or practice is a question for the court. In determining whether an act or practice is unconscionable, the court shall consider circumstances of which the supplier knew or had reason to know, such as, but not limited to the following that:

(2) when the consumer transaction was entered into, the price grossly exceeded the price at which similar property or services were readily obtainable in similar transactions by similar consumers;

(1) The supplier took advantage of the inability of the consumer reasonably to protect the consumer's interests because of the consumer's physical infirmity, ignorance, illiteracy, inability to understand the language of an agreement or similar factor;

(3) the consumer was unable to receive a material benefit from the subject of the transaction; (4) when the consumer transaction was entered into, there was no reasonable probability of payment of the obligation in full by the consumer;

(5) the transaction the supplier induced the consumer to enter into was excessively onesided in favor of the supplier; (6) the supplier made a misleading statement of opinion on which the consumer was likely to rely to the consumer's detriment; and

(7) except as provided by K.S.A. 50-639, and amendments thereto, the supplier excluded, modified or otherwise attempted to limit either the implied warranties of merchantability and fitness for a particular purpose or any remedy provided by law for a breach of those warranties.

The UCC neither defines the concept of unconscionability nor provides the elements or perimeters of the doctrine. Perhaps this was the real intent of the drafters of the code. To define the doctrine is to limit its application, and to limit its application is to defeat its purpose.

Although the doctrine of unconscionability is difficult to define precisely courts have identified a number of factors or elements as aids for determining its applicability to a given set of facts. These factors include: (1) The use of printed form or boilerplate contracts drawn skillfully by the party in the strongest economic position, which establish industry wide standards offered on a take it or *759 leave it basis to the party in a weaker economic position (Henningsen v. Bloomfield Motors, Inc., supra; Campbell Soup Co. v. Wentz, 172 F. 2d 80 ); (2) a significant cost-price disparity or excessive price; (3) a denial of basic rights and remedies to a buyer of consumer goods (Williams v. Walker-Thomas Furniture Company, 350 F. 2d 445 ; 18 ALR 3d 1305 ); (4) the inclusion of penalty clauses; (5) the circumstances surrounding the execution of the contract, including its commercial setting, its purpose and actual effect (In re Elkins-Dell Manufacturing Company, 253 F. Supp. 864 , [E. D. Pa.]); (6) the hiding of clauses which are disadvantageous to one party in a mass of fine print trivia or in places which are inconspicuous to the party signing the contract (Henningsen v. Bloomfield Motors, Inc., supra); (7) phrasing clauses in language that is incomprehensible to a layman or that divert his attention from the problems raised by them or the rights given up through them; (8) an overall imbalance in the obligations and rights imposed by the bargain; (9) exploitation of the underprivileged, unsophisticated, uneducated and the illiterate (Williams v. Walker-Thomas Furniture Company, supra); and (10) inequality of bargaining or economic power.

Important to this case is the concept of inequality of bargaining power. The UCC does not require that there be complete equality of bargaining power or that the agreement be equally beneficial to both parties (1 Anderson, §2-302:11, p. 401). As has been pointed out: “[The language of the comment to § 2-302 means] . . . that mere disparity of bargaining strength, without more, is not enough to make out a case of unconscionability. Just because the contract I signed was proffered to me by Almighty Monopoly Incorporated does not mean that I may subsequently argue exemption from any or all obligation: at the very least, some element of deception or substantive unfairness must presumably be shown.” (78 Yale L. J., supra, pp. 766-767.) The cases seem to support the view that there must be additional factors such as deceptive bargaining conduct as well as unequal bargaining power to render the contract between the parties unconscionable. In summary, the doctrine of unconscionability is used by the courts to police the excesses of certain parties who abuse their right to contract freely. It is directed against one-sided, oppressive and unfairly surprising contracts, and not against the con *760 sequences per se of uneven bargaining power or even a simple old-fashioned bad bargain (1 Anderson, supra, § 2-302.11, p. 401).

Each case of this type must necessarily rest upon its own facts but after examining the terms of the contract, the manner of its execution and the knowledge and experience of appellant we think the contract was neither inequitable nor unconscionable so as to deny its enforcement.

A contract may be annulled on grounds of lesion only in those cases provided by law.

The cause of an obligation is unlawful when the enforcement of the obligation would produce a result prohibited by law or against public policy.

See also La. C.C. art. 1965 (“A contract may be annulled on grounds of lesion only in those cases provided by law.”).

an allegation of inadequate price paid for a mineral interest is the essence of a lesion claim, but is not actionable.

Thus, whether viewed at the time of offer or time of sale, we find plaintiffs’ allegations of insufficient price are claims of lesion, which are barred by Article 17.

As to mineral rights, however, Article 17 provides: “A sale of a mineral right is not subject to rescission for lesion beyond moiety.”

Examples of obligations with unlawful causes include those that arise from gaming, gambling, and wagering not authorized by law.

Unconscionability With respect to a consumer credit transaction, if the court as a matter of law finds the agreement or any clause of the agreement to have been unconscionable at any time it was made the court may refuse to enforce the agreement, or it may enforce the remainder of the agreement without the unconscionable clause, or it may so limit the application of any unconscionable clause as to avoid any unconscionable result; provided, however, for the purposes of this chapter, an agreement, clause, charge or practice expressly permitted by this chapter or any other law or regulation of this state or of the United States or subdivision of either, or an agreement, clause, charge or practice necessarily implied as being permitted by this chapter or any other law or regulation of this state or the United States or any subdivision of either is not unconscionable.

Thus, plaintiffs have no cause of action. For the foregoing reasons, the judgment of the appellate court is reversed and the ruling of the district court granting the defendants’ exception of no cause of action and dismissing the case with prejudice is reinstated. REVERSED.

If the court as a matter of law finds the contract or any clause of the contract to have been unconscionable at the time it was made the court may refuse to enforce the contract, or it may enforce the remainder of the contract without the unconscionable clause, or it may so limit the application of any unconscionable clause as to avoid any unconscionable result.

When it is claimed or appears to the court that the contract or any clause thereof may be unconscionable the parties shall be afforded a reasonable opportunity to present evidence as to its commercial setting, purpose and effect to aid the court in making the determination.

Consequential damages may be limited or excluded unless the limitation or exclusion is unconscionable. Limitation of consequential damages for injury to the person in the case of consumer goods is prima facie unconscionable but limitation of damages where the loss is commercial is not.

It may also be noted that when a contract of adhesion is exacted by the overreaching of a party, the defense of unconscionability may be asserted.

Although the Defendant urged at oral argument that the writing which underlies the controversy was a contract of adhesion, we do not reach that question in disposing of the appeal before us.

In sum, at the hearing on damages in Superior Court the Plaintiff might have satisfied its burden of proof in either of two ways. It could have established by competent evidence that the provision for liquidated damages met the two-fold requirement of our law. Alternatively, the Plaintiff could have adduced evidence establishing the actual damages to it which resulted from this Defendant’s breach. We conclude that the Plaintiff failed to do either. The entry will be: Appeal sustained. Judgment set aside. Remanded with direction to enter judgment for Defendant, Elvin Hartley.

Finally, this was not “a contract of adhesion ... exacted by the overreaching of a party [where] the defense of unconscionability may be asserted.”

While "unconscionable” contracts are specifically made unenforceable in 11 M.R.S.A. § 2-302, governing sales of goods, the Law Court has also long applied the doctrine of uncon-scionability as part of the equity power. See, e.g., Bither v. Packard, 115 Me. 306, 314 , 98 A. 929, 933 (1916).

Judgment vacated. Remanded to the Superior Court for proceedings consistent with the opinion herein. All concurring.

We merely hold that when a party drafts an agreement requiring arbitration, and offers it to individuals on a take-it-or-leave-it basis, the drafter bears the risk if its chosen language is found to be ambiguous.

Accordingly, although we reach our conclusion on different grounds than did the motion court, we affirm the court's denial of the motion to stay and compel arbitration of counts IV, V, VIII, and X. [6] The entry is: Judgment affirmed.

We emphasize, however, that our decision is grounded in a commercial setting involving a contract between two merchants of relatively equal bargaining power and is not intended to establish that a consequential damage bar survives a failure of the limited repair remedy in consumer transactions that involve relatively commonplace or uncomplicated products such as automobiles and trucks.

By definition, an adhesion contract is drafted unilaterally by a business enterprise and forced upon an unwilling and often unknowing public for services that cannot readily be obtained elsewhere. See generally Jones v. Dressel, Colo., 623 P.2d 370, 374 (1981); Chandler v. Aero Mayflower Transit Co., 374 F.2d 129, 135 (4th Cir.1967). It is a contract generally not bargained for, but which is imposed on the public for necessary service on a "take it or leave it" basis. Even though a contract is on a printed form and offered on a "take it or leave it" basis, those facts alone do not cause it to be an adhesion contract. There must be a showing that the parties were greatly disparate in bargaining power, that there was no opportunity for negotiation *925 and that the services could not be obtained elsewhere.

Under the circumstances of this case, where the parties were both merchants and there was no great disparity in their bargaining strength and where the claim is for commercial loss, there is nothing that makes it unconscionable to enforce the allocation of risk incorporated into the parties’ contract. The consequential damages exclusion is valid and enforceable.

(3) Consequential damages may be limited or excluded unless the limitation or exclusion is unconscionable. Limitation of consequential damages for injury to the person in the case of consumer goods is prima facie unconscionable but limitation of damages where the loss is commercial is not.

The rule we adopt today, allowing courts to retain jurisdiction over credible claims that a contract is void, leaves room for consumers to escape obvious abuses of power in contracting. See, e.g., Minn.Stat. § 336.2-302 (2002) (allowing courts to refuse to enforce an unconscionable contract).

In our view, there was no disparity in bargaining power. Schlobohm voluntarily applied for membership in Spa Petite and acceded to the terms of membership. There was no showing that Spa Petite's services were necessary or that the services could not have been obtained elsewhere.

We conclude that there was absent any disparity of bargaining power under these circumstances and that the contract was not one of adhesion.

If the court as a matter of law finds the contract or any clause of the contract to have been unconscionable at the time it was made the court may refuse to enforce the contract, or it may enforce the remainder of the contract without the unconscionable clause, or it may so limit the application of any unconscionable clause as to avoid any unconscionable result.

When it is claimed or appears to the court that the contract or any clause thereof may be unconscionable the parties shall be afforded a reasonable opportunity to present evidence as to its commercial setting, purpose and effect to aid the court in making the determination.

Under Montana law, a contract provision can be unconscionable and therefore unenforceable if “when considered in its context, [it] is unduly oppressive, unconscionable or against public policy.” Iwen, ¶ 27.5 Unconscionability in Montana contract law is a concept adapted from the Uniform Commercial Code, and requires a determination that the contractual term is unreasonably favorable to the drafter, and there is no meaningful choice on the part of the other party but to accept the provision.

This arbitration provision unreasonably favors Global to the detriment of Ossello and is therefore unconscionable and unenforceable.

For the foregoing reasons, we conclude that the District Court did not err in reserving to itself the determination of arbitrability, nor did it err in declaring that the arbitration provision is unconscionable and therefore not enforceable against Ossello.

One need only look at the language of the arbitration provision itself to determine that it is unreasonably favorable to U.S. West Direct, the drafter.

A contract is not substantively unconscionable unless the terms are grossly unfair under the circumstances that existed when the parties entered into the contract.

The unconscionability of a contract provision presents a question of law. See Melcher v. Boesch Motor Co., 188 Neb. 522 , 198 N.W.2d 57 (1972). When considering whether an agreement is unconscionable, this court has stated that the term “unconscionable” means manifestly unfair or inequitable.

In a commercial setting, however, substantive unconscionability alone is usually insufficient to void a contract or clause.

A court must also consider whether the contract formation was procedurally unconscionable.

An essential fact in determining unconscionability is the disparity in respective bargaining positions of parties to a contract.

In general, we have been reluctant to rewrite contracts between parties experienced in business, as opposed to contracts between consumers and skilled corporate parties.

We conclude that it is unnecessary to reach the issue of unconscionability in this case because the record contains no evidence relating to this issue. We agree with the district court that the record contains no evidence of a disparity in the parties’ respective bargaining positions, which is an essential fact upon which any determination of unconscionability depends.

For example, there is no evidence concerning the availability of yellow pages advertising from sources other than GTE, or the availability, relative cost, and efficacy of other types of advertising which Tucker & Sons could have utilized. Likewise, there is no evidence regarding whether Tucker & Sons ever attempted to negotiate the elimination of the limitation of liability clause in previous contracts. The district court correctly concluded that it could not take judicial notice of the relative bargaining power of the parties. In *467 its petition, Tucker & Sons claimed that the limitation of liability clause was unconscionable because it “lacked equal bargaining power in the drafting of said clause, and lacked equal bargaining power in the negotiation of the terms and provisions of said clause.” In its answer, GTE denied Tucker & Sons’ allegation. The relative bargaining power of the parties was therefore a contested factual issue which could not have been the subject of judicial notice either in the district court or on appeal, since a court may not take judicial notice of disputed facts. See In re Interest of N.M. and J.M., 240 Neb. 690 , 484 N.W.2d 77 (1992). We therefore conclude that the district court did not err in finding that there was an inadequate factual basis upon which to find the limitation of liability clause unconscionable.

The doctrine of unconscionability set forth in § 2-302 is not a basis for the award of money damages.

As certain courts have noted, this provision of the Uniform Commercial Code was not intended to create a cause of action and cannot be used as a basis for damages.

We are also of the opinion that the issue of unconscionability must be pleaded in order to be considered by the court.

the issue was neither raised nor litigated as a defense in the trial court, and hence can be neither urged nor considered for the first time on appeal

We conclude that under the circumstances presented here, the exclusion is procedurally unconscionable. Having found the exclusion both substantively and procedurally unconscionable, we decline to enforce it.

Generally, the issue of unconscionability is divided into substantive unconscionability and procedural unconscionability.

None of the factors is conclusive; rather, unconscionability is determined under the totality of the circumstances.

Although the test is stated in T.V. Transmission, we have not found a Nebraska case that has applied it.

However, in view of the fact that the issue is not properly before us, we need not and do not decide whether a defense based upon the unconscionability of a contract extends to transactions other than for the sale of goods, 14 S. Williston, A Treatise on the Law of Contracts § 1632B (3d ed. 1972), nor do we need concern ourselves with what the precise elements of such a defense might be.

Where a specific statute holds a tenant responsible for fire damages caused by his or her negligence, we cannot hold a lease provision doing so void as against public policy or unconscionable.

Courts should be cautious in holding contracts void on the ground that the contract is contrary to public policy; to be void as against public policy, the contract should be quite clearly repugnant to the public conscience.34 We find no such repugnancy.

To determine if a contract is substantively unconscionable, we view the contract at the time it was made.

Here, both parties are commercial entities and we have no record of a disparity in bargaining power. The terms of the contract are unambiguous, the entire contract is only four pages long, and the print above the parties’ signatures reads, “CUSTOMER HAS READ AND AGREES TO BE BOUND BY THIS AGREEMENT, INCLUDING THE TERMS AND CONDITIONS ATTACHED HERETO.” Accordingly, we can- not find the clause unconscionable and cannot rewrite the con- tract to exclude it.

The conscionability of the provision became a matter of law for the court. § 2-302, U. C. C. It is commented, under that section, that: “The basic test 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.”

(b) Whenever it is claimed, or appears to the court, that a contract or any contract clause is or may be unconscionable, the parties, in order to aid the court in making the determination, shall be afforded a reasonable opportunity to present evidence as to: (1) The commercial setting of the negotiations; (2) Whether a party has knowingly taken advantage of the inability of the other party reasonably to protect his or her interests by reason of physical or mental infirmity, illiteracy, or inability to understand the language of the agreement or similar factors; (3) The effect and purpose of the contract or clause; and (4) If a sale, any gross disparity, at the time of contracting, between the amount charged for the real estate and the value of the real estate measured by the price at which similar real estate was readily obtainable in similar transactions, but a disparity between the contract price and the value of the real estate measured by the price at which similar real estate was readily obtainable in similar transactions does not, of itself, render the contract unconscionable.

We find that the agreement between the parties is unconscionable insofar as it requires alimony payments of $400 per month. We further find that, considering the economic circumstances of the parties, including specifically that *200 each is trying to rearrange his or her life after a serious financial comedown, the trial court did not abuse its discretion in awarding alimony of $1 annually until Bonnie dies or is remarried.

With regard to the meaning of “unconscionable,” we have interpreted that word to mean “manifestly unfair or inequitable.”

Usually, the issue should not be determined before the plaintiffs have an opportunity to present evidence of disparity in their bargaining positions and that the provisions unreasonably favored the defendant.

And the pleadings and attachments conclusively refute any disparity between the parties’ bargaining positions.

Since the issue is likely to arise again on remand, we provide direction for the lower court by determining in advance whether American Cyanamid’s limitation of remedies is unconscionable.

The issue was not raised at any of these points, and the defendant can *356 hardly complain on appeal that it was prejudiced.

The court, upon finding as a matter of law that a contract or contract clause was unconscionable at the time the contract was made, may refuse to enforce the contract, enforce the remainder of the contract without the unconscionable clause, or limit the application of any unconscionable clause in order to avoid an unconscionable result.

In that situation § 42-366(2) provides in part that “the terms of the agreement . . . shall be binding upon the court unless it finds, after considering the economic circumstances of the parties and any other relevant evidence produced by the parties . . . that the agreement is unconscionable.” The general law is settled. If the agreement between the parties is not unconscionable, the agreement binds both the parties and the court. See Paxton v. Paxton, 201 Neb. 545 , 270 N.W.2d 900 (1978). If the agreement is unconscionable, it is not binding, and the court may make orders for the disposition of the property and maintenance.

(1) If the court as a matter of law finds the contract or any clause of the contract to have been unconscionable at the time it was made the court may refuse to enforce the contract, or it may enforce the remainder of the contract without the unconscionable clause, or it may so limit the application of any unconscionable clause as to avoid any unconscionable result. (2) When it is claimed or appears to the court that the contract or any clause thereof may be unconscionable the parties shall be afforded a reasonable opportunity to present evidence as to its commercial setting, purpose and effect to aid the court in making the determination.

Thus, in determining whether to enforce the terms of a contract of adhesion, courts have looked not only to the take-it-or-leave-it nature or the standardized form of the document but also to the subject matter of the contract, the parties' relative bargaining positions, the degree of economic compulsion motivating the "adhering" party, and the public interests affected by the contract.

Applying those criteria to the project notes, we find insufficient reason to invalidate the notice-by-publication term.

We agree that the doctrine of adhesion contracts should not be extended to regulated securities transactions. We now reverse the judgment of the Appellate Division, which was based on that court's holding that the subject securities constituted a contract of adhesion, but remand the matter to the Law Division for resolution of the remaining claims asserted by the plaintiffs.

A contract of adhesion is defined as one "presented on a take-it-or-leave-it basis, commonly in a standardized printed form, without opportunity for the `adhering' party to negotiate." Rudbart, supra, 127 N.J. at 353 , 605 A. 2d 681 (citations omitted). Although a contract of adhesion may require one party to choose either to accept or reject the contract as is, the agreement nevertheless may be enforced. See id. at 353, 356-61 , 605 A. 2d 681 (noting such considerations as "the subject matter of the contract, the parties' relative bargaining positions, the degree of economic compulsion motivating the `adhering' party, and the public interests affected by the contract").

Unless the context otherwise requires, this Chapter applies to transactions in goods; it does not apply to any transaction which although in the form of an unconditional contract to sell or present sale is intended to operate only as a security transaction nor does this Chapter impair or repeal any statute regulating sales to consumers, farmers or other specified classes of buyers.

The project notes involved here unquestionably fit our definition of contracts of adhesion. That is, they were presented to the public on standardized printed forms, on a take-it-or-leave-it basis without opportunity for purchasers to negotiate any of the terms.

But the observation that the notes fit the definition of contracts of adhesion is the beginning, not the end, of the inquiry: we must now determine as a matter of policy whether to enforce the unilaterally-fixed terms of the notes.

We therefore conclude that although the project notes fit our literal definition of contracts of adhesion, plaintiffs are bound by the provision for notice by publication because of the unique policy considerations attendant on securities offerings.

In sum, although the terms of the agreement were presented "as is" to Stelluti, rendering this a fairly typical adhesion contract in its procedural aspects, we hold that the agreement was not void based on any notion of procedural unconscionability.

To the extent that any contract of adhesion also would require review to determine whether its enforcement implicates a matter of public interest, see ibid., that test overlaps, and is subsumed by the more precise analysis employed when assessing whether to enforce an exculpatory agreement.

We address first the basic determination of the trial court on which its grant of relief is premised: that the security agreement was unconscionable when entered into and, therefore, unenforceable (see, UCC 2-302). An unconscionable contract has been defined as one which "is so grossly unreasonable or unconscionable in the light of the mores and business practices of the time and place as to be unenforcible according to its literal terms. (See 1 Corbin on Contracts, § 128, p. 400.)” (Mandel v Liebman, 303 NY 88, 94 .) The doctrine, which is rooted in equitable principles, is a flexible one and the concept of unconscionability is "intended to be sensitive to the realities and nuances of the bargaining process” (Matter of State of New York v Avco Fin. Serv., 50 NY2d 383, 389-390 ). A determination of unconscionability generally requires a showing that the contract was both procedurally and substantively unconscionable when made — i.e., "some showing of an 'absence of meaningful choice on the part of one of the parties together with contract terms which are unreasonably favorable to the other party’ (Williams v Walker-Thomas Furniture Co., 350 F2d 445, 449).” (Matter of State of New York v Avco Fin. Serv., supra, at 389; see also, Jones v Star Credit Corp., 59 Misc 2d 189,192 .)

After a nonjury trial, Supreme Court concluded that the security agreement was unconscionable and, therefore, unenforceable. Accordingly, it held that Chase acted illegally in transferring the funds from the checking account to the other account and thereby putting the funds beyond the reach of Jamaica Tobacco. The court awarded compensatory, consequential and punitive damages to the assignee, finding that Chase had acted in bad faith and that it had caused or contributed to Jamaica Tobacco’s subsequent business collapse by failing to notify it of the transfer of the account, dishonoring checks payable to the company’s creditors, and preventing Jamaica Tobacco from using the funds in its business. The Appellate Division reversed on the law and the facts and dismissed the complaint, holding that the security agreement was neither substantively nor procedurally unconscionable.

The procedural element of unconscionability requires an examination of the contract formation process and the alleged *11 lack of meaningful choice. The focus is on such matters as the size and commercial setting of the transaction (see, UCC 2-302 [2]), whether deceptive or high-pressured tactics were employed, the use of fine print in the contract, the experience and education of the party claiming unconscionability, and whether there was disparity in bargaining power

Nor are we persuaded by the assignee’s argument that the security agreement was substantively unconscionable. This question entails an analysis of the substance of the bargain to determine whether the terms were unreasonably favorable to the party against whom unconscionability is urged (see, Matter of State of New York v Avco Fin. Serv., supra, at 389). While determinations of unconscionability are ordinarily based on the court’s conclusion that both the procedural and substantive components are present (see, Matter of State of New York v Avco Fin. Serv., supra, at 389), there have been exceptional cases where a provision of the contract is so outrageous as to warrant holding it unenforceable on the ground of substantive unconscionability alone (see, State of New York v Wolowitz, 96 AD2d 47, 68 , supra; White and Summers, Uniform Commercial Code § 4-7, at 164, 165 [2d ed]). The contract terms in question here would clearly not fall within this exceptional category. Moreover, considering their commercial context, their purpose, and their effect, we conclude, that by any reasonable standard, those terms were not so overbalanced in favor of Chase as to be found substantively unconscionable.

Neither does the argument that the terms of the security agreement were inconspicuous because typed in fine print on the reverse side of the application, nor the contention that Frohlich was not alerted to its existence. While the location and the size of print may, in a proper case, be factors bearing on procedural unconscionability, they have no bearing where, as here, the existence of the security agreement was clearly noted in boldface print directly above the signature line (see, Equitable Lbr. Corp. v IPA Land Dev. Corp., 38 NY2d 516, 518, n 2 , supra)

Here, the claim of procedural unconscionability is based solely on Frohlich’s testimony that he was unaware of the terms in the security agreement, that the security agreement was never called to his attention, that he never read it, that no one read it to him, and that, indeed, he did not know of its existence. There is no allegation of deception or that Frohlich lacked experience or expertise. Nor is there any suggestion that the application was signed as a result of high-pressured tactics. On the contrary, Frohlich signed the instrument in his own office where he had time to study it and, if necessary, to discuss it with a lawyer. The contract concerned a type of commercial transaction routinely entered into in the course of Jamaica Tobacco’s business and one with which Frohlich was necessarily familiar from his several years of running the business. Frohlich signed the application form immediately below the bold-face legend stating: "The Security Agreement on the reverse hereof is hereby accepted and made applicable to this Application and the Credit.” He states that he did not read the front of the form or the legend but gives no explanation for his failure to do so. Under the general rule, Jamaica Tobacco would be conclusively bound by the security agreement irrespective of Frohlich’s testimony that he did not read it and was unaware of its terms (see, Metzger v Aetna Ins. Co., 227 NY 411, 416 ; 9 Wigmore, Evidence § 2415 [Chadbourn rev 1981]). Indeed, it has been held that the failure of a signer to read an instrument in circumstances analogous to those here amounts to gross negligence (see, Pimpinello v Swift & Co., 253 NY 159, 162-163 ; Wallach Agency v Bank of N. Y., 75 AD2d 878, 879 ).

Given the commercial setting of this transaction, Frohlich’s claim that he was unaware of the security agreement provisions — even if the claim were to be fully credited — does not support a determination of procedural unconscionability

Accordingly, the order of the Appellate Division should be affirmed, with costs. Chief Judge Wachtler and Judges Simons, Kaye, Alexander and Titone concur; Judge Bellacosa taking no part. Order affirmed, with costs.

A court will generally refuse to enforce a contract on the ground of unconscionability only when the inequality of the bargain is so manifest as to shock the judgment of a person of common sense, and where the terms are so oppressive that no reasonable person would make them on the one hand, and no honest and fair person would accept them on the other.

In determining whether a contract is unconscionable, a court must consider all the facts and circumstances of a particular case. If the provisions are then viewed as so one-sided that the contracting party is denied any opportunity for a meaningful choice, the contract should be found unconscionable.

After considering all the facts before the trial court, we hold that the contract at issue cannot be declared unenforceable on the grounds of unconscionability. There was no inequality of bargaining power between the parties.

A party asserting that a contract is unconscionable must prove both procedural and substantive unconscionability.

While this Court has never explicitly adopted this framework, we conclude that it is supported by the Court's case law and adopt it here. In Brenner , for example, this Court determined that a contract between a parent and a private school was not unconscionable. 302 N.C. at 214 , 274 S.E.2d at 211 . The Court so held after considering whether there was inequality of bargaining power between the parties, whether plaintiff was "forced to accept defendant's terms," and whether the contract itself "was one that a reasonable person of sound judgment might accept." Id. at 213-14 , 274 S.E.2d at 211 . Thus, the Court considered both the procedural and substantive aspects of the contract at issue.

According to Rite Color Chemical Co., procedural unconscionability involves "bargaining naughtiness" in the form of unfair surprise, lack of meaningful choice, and an inequality of bargaining power. 105 N.C.App. at 20 , 411 S.E.2d at 648 . Substantive unconscionability, on the other hand, refers to harsh, one-sided, and oppressive contract terms.

Therefore, we note that while the presence of both procedural and substantive problems is necessary for an ultimate finding of unconscionability, such a finding may be appropriate when a contract presents pronounced substantive unfairness and a minimal degree of procedural unfairness, or vice versa.

Ultimately, based on the facts and circumstances of this case, we hold that the arbitration clause in plaintiffs' loan agreements is unconscionable and therefore unenforceable. The inequality of bargaining power between the parties and the oppressive and one-sided nature of the clause itself lead us to this conclusion.

Justice EDMUNDS concurring in the result only. I concur in the result only and agree that the trial court properly denied defendants' motion to compel arbitration. I write separately because I believe that this Court should apply the totality of the circumstances test set out in Brenner v. Little Red School House, Ltd., 302 N.C. 207 , 274 S.E.2d 206 (1981).

(a) If the court as a matter of law finds the contract or any clause of the contract to have been unconscionable at the time it was made the court may refuse to enforce the contract, or it may enforce the remainder of the contract without the unconscionable clause, or it may so limit the application of any unconscionable clause as to avoid any unconscionable result.

Any provision in a contract requiring a party to the contract to waive his right to a jury trial is unconscionable as a matter of law and the provision shall be unenforceable. This section does not prohibit parties from entering into agreements to arbitrate or engage in other forms of alternative dispute resolution.

Thus, the legal theories upon which Tillman’s substantive unconscionability analysis is based have been undermined by subsequent decisions of the United States Supreme Court in the context of cases under the FAA.

We must therefore hold that the one-sided quality of an arbitration agreement is not sufficient to find it substantively unconscionable.

On appeal, the North Carolina Supreme Court reversed the Court of Appeals, holding the arbitration agreement to be unconscionable. In that case, a plurality of three justices concurred in the decision of the Court, two justices concurred in the result only, and two justices dissented. The plurality opinion stated that unconscionability was an affirmative defense, and that the party asserting that defense had the burden of establishing that the agreement was unconscionable. Tillman, 362 N.C. at 102, 655 S.E.2d at 369. To establish unconscionability, a party must demonstrate both procedural unconscionability and substantive unconscionability.

(b) When it is claimed or appears to the court that the contract or any clause thereof may be unconscionable the parties shall be afforded a reasonable opportunity to present evidence as to its commercial setting, purpose and effect to aid the court in making the determination.

If the court as a matter of law finds the contract or any clause of the contract to have been unconscionable at the time it was made, the court may refuse to enforce the contract, or it may enforce the remainder of the contract without the unconscionable clause, or it may so limit the application of any unconscionable clause as to avoid any unconscionable result.

When it is claimed or appears to the court that the contract or any clause thereof may be unconscionable, the parties shall be afforded a reasonable opportunity to present evidence as to its commercial setting, purpose, and effect to aid the court in making the determination.

In the memorandum decision, the court referred to the possibility of an unconscionable contract as being the impetus for reaching its decision. Under the circumstances, this reference and consideration was improper. First of all, if the trial court were thinking of unconscionability in terms of the Uniform Commercial Code (U.C.C.) and Section 41-02-19, N.D.C.C., we question whether the U.C.C. provision addressing unconscionable contracts is applicable to this situation.

The contract in question is a lease provision, exchanging the use of land for the care of cattle. There is an absence of "goods" being sold or exchanged by merchants. From the record, it appears to be more of a "services" contract, one not covered under the U.C.C.

Although we agree with the Cooks that a determination of unconscionability, if applicable, is a question of law for the court, Constr. Ass'n, Inc. v. Fargo Water Equip. Co., 446 N.W.2d 237 (N.D.1989), it is our view that the issue should have been considered, if appropriate, only after reasonable opportunity was afforded to present evidence, preferably at a separate hearing, with adequate notice. "Section 41-02-19(2) requires that the parties be afforded a reasonable opportunity to present evidence as to the contract's commercial setting, purpose, and effect to aid the court in making the determination of unconscionability." Farmers Elevator & Mercantile Co. v. Farm Builders, Inc., 432 N.W.2d 864, 869 (N.D.1988).

we decline to indulge in further discussion on this point, as it is one more properly addressed by the parties and decided by the court on remand.

Unconscionability is a doctrine which allows courts to deny enforcement of a contract because of procedural abuses arising out of the contract’s formation and substantive abuses relating to the terms of the contract. Weber v. Weber, 1999 ND 11, ¶ 11 , 589 N.W.2d 358 .

The determination whether a particular contractual provision is unconscionable is a question of law for the court. Knutson v. Knutson, 2002 ND 29, ¶ 16 , 639 N.W.2d 495 ; Terry v. Terry, 2002 ND 2, ¶ 14 , 638 N.W.2d 11 ; Cook v. Hansen, 499 N.W.2d 94, 99 (N.D.1993); Construction Assocs., 446 N.W.2d at 241 . This Court has recognized, however, that the determination of unconscionability is dependent upon the factual circumstances of the case. See Knutson, at ¶ 16; Terry , at ¶ 14; Cook , at 99. Because the determination of unconscionability is fact specific, courts must “consider such claims on a case-by-case basis,” Forsythe v. BancBoston Mortgage Corp., 135 F.3d 1069, 1074 (6th Cir.1997), and assess the totality of the circumstances. 17 C.J.S. Contracts ¶ 4 (1999).

Because under North Dakota law the determination of *922 unconscionability is fact specific, we are unable to say that all “no class action” clauses are unconscionable, or that all such clauses are not unconscionable.

The *359 party asserting unconscionability of a contract bears the burden of proving that the agreement is both procedurally and substantively unconscionable.

Accordingly, we agree with the Ohio and federal courts that have applied a de novo standard of review to a determination whether an arbitration agreement alleged to be unconscionable is enforceable.

The appellate court in this case incorrectly determined that the entire contract was unconscionable based in part on that court’s view that several provisions in addition to the arbitration clause were unfair.

Unconscionability includes both “ ‘an absence of meaningful choice on the part of one of the parties together with contract terms which are unreasonably favorable to the other party.’ ” Lake Ridge Academy v. Carney (1993), 66 Ohio St.3d 376, 383 , 613 N.E.2d 183 , quoting Williams v. Walker-Thomas Furniture Co. (C.A.D.C.1965), 350 F.2d 445, 449

Similarly, when a party challenges an arbitration provision as unconscionable pursuant to R.C. 2711.01(A), the party must show that the arbitration clause itself is unconscionable.

Arbitration agreements are “valid, irrevocable, and enforceable, except upon grounds that exist at law or in equity for the revocation of any contract.” R.C. 2711.01(A). Unconscionability is a ground for revocation of a contract.

A determination of whether a written contract is unconscionable is an issue of law. See Ins. Co. of N. Am. v. Automatic Sprinkler Corp. of Am. (1981), 67 Ohio St.2d 91, 98 , 21 O.O.3d 58 , 423 N.E.2d 151 ; see also Bolton v. Crockett Homes, Inc., 5th Dist. No. 2004CA00051, 2004-Ohio-7318 , 2004 WL 3251302 , ¶ 8 (unconscionability of arbitration clause in home-construction agreement is a question of law). Courts review questions of law de novo.

When a trial court makes factual findings, however, supporting its determination that a contract is or is not unconscionable, such as any findings regarding the circumstances surrounding the making of the contract, those factual findings should be reviewed with great deference.

For all of these reasons, we hold that a trial court’s decision on a motion pursuant to R.C. 2711.02 to stay litigation in favor of arbitration must be reviewed de novo when the issue to be decided is whether the arbitration agreement or clause is unconscionable as a matter of law. The court of appeals erred by determining the issue of unconscionability regarding the parties’ entire contract, rather than just the arbitration clause. For the reasons discussed above, we conclude, unlike the court of appeals, that the arbitration agreement is not unconscionable. {¶ 70} Accordingly, the judgment of the court of appeals is affirmed in part and reversed in part, and the cause is remanded to the trial court for further proceedings not inconsistent with this opinion. Judgment affirmed in part and reversed in part, and cause remanded.

The doctrine of unconscionability, however, is largely inapplicable to this case, and, to the extent that it may apply, we conclude that the fee set by the Bank was not unconscionable. Unconscionability is a legal issue that must be assessed as of the time of contract formation. W.L. May Co. v. Philco-Ford Corp., 273 Or 701, 707 , 543 P2d 283 (1975). Thus, the doctrine applies to contract terms rather than to contract performance.

The specific fee charged, then, was not part of the depositors’ agreement with the Bank; rather, the fee was set by the Bank as part of its performance of the account agreement. The unconscionability doctrine is inapplicable to the amount of the fee.

Unconscionability is “assessed as of the time of contract formation,” and the doctrine “applies to con- tract terms rather than to contract performance.”

Unconscionability may be procedural or substan- tive. Procedural unconscionability refers to the conditions of contract formation and focuses on two factors: oppression and surprise.

Both procedural and substantive deficiencies—frequently in combination—can preclude enforce- ment of a contract or contract term on unconscionability grounds.

Oppression exists when there is inequality in bargaining power between the parties, resulting in no real opportunity to negotiate the terms of the contract and the absence of meaningful choice.

Surprise involves whether terms were hidden or obscure from the vantage of the party seeking to avoid them. Id. Generally speaking, factors such as ambiguous contract wording and fine print are the hallmarks of surprise.

Substantive unconscionability, on the other hand, generally refers to the terms of the contract, rather than the circumstances of formation, and focuses on whether the substantive terms contravene the public interest or public policy.

In some jurisdictions, courts require both procedural and substantive unconscionability before they will invalidate a contract.

This court has not addressed that issue, and because, as explained below, we conclude that both procedural and substantive considerations support the conclusion that the release here is unconscionable, we do not decide that issue in this case.

If the court as a matter of law finds the contract or any clause of the contract to have been unconscionable at the time it was made the court may refuse to enforce the contract, or it may enforce the remainder of the contract without the unconscionable clause, or it may so limit the application of any unconscionable clause as to avoid any unconscionable result. (2) When it is claimed or appears to the court that the contract or any clause thereof may be unconscionable the parties shall be afforded a reasonable opportunity to present evidence as to its commercial setting, purpose and effect to aid the court in making the determination.

If the court, as a matter of law, finds: (1) A rental agreement or any provision thereof was unconscionable when made, the court may refuse to enforce the agreement, enforce the remainder of the agreement without the unconscionable provision, or limit the application of any unconscionable provision to avoid an unconscionable result; or

If unconscionability is put into issue by a party or by the court upon its own motion, the parties shall be afforded a reasonable opportunity to present evidence as to the setting, purpose and effect of the rental agreement or settlement to aid the court in making the determination.

This chapter shall be known and may be cited as the “Residential Landlord and Tenant Act”.

It is well established that in Rhode Island a contract violates public policy only if it is: “[1] injurious to the interests of the public, [2] interferes with the public welfare or safety, [3] is unconscionable; or [4] tends to injustice or oppression.”

a contract or agreement is generally against public policy if.it is injurious to the interests of the public, interferes with the public welfare or safety, is unconscionable, or tends to injustice or oppression.

A contract, or a term contained therein violates public policy only if it is: “[1] injurious to the interests of the public, [2] interferes with the public welfare or safety, [3] is unconscionable; or [4] tends to injustice or oppression.”

Long ago the United States Supreme Court in Hume v. United States, 132 U.S. 406, 411, 415 , 10 S.Ct. 134, 136, 137 , 33 L.Ed. 393, 396, 397 (1889), ruled that a court would usually refuse to enforce a contract on the ground of unconscionability only when the inequality of the bargain was so manifest as to shock the judgment *447 of a person of good sense and when the terms were so unreasonable that

First, plaintiffs assert that “in making its determination as to the unconscionability of the contract or clause, the court erred in not affording [plaintiffs] a reasonable opportunity to present evidence as to its commercial setting, purpose and effect,” as required by G.L.1956 § 6A-2-302 (2), to support their claim that the waiver of liability was unconscionable “in light of the general commercial background and commercial needs of the particular trade or case.”

In this case, plaintiffs did not avail themselves of the opportunity to submit evidence demonstrating that the limitation of liability was unconscionable in light of the general commercial background and the commercial needs of this particular trade or case, and consequently, the hearing justice properly granted summary judgment on this issue.

limitation of liability clauses are not unconscionable merely because buyers are not fully protected for damages that may arise from the malfunction of their purchased goods or service.

The fact that plaintiffs in this case have no protection other than their bargained for remedy of replacement film does not make the limitation of liability clause unconscionable.

The hearing justice mistakenly characterized his consideration of whether the agreement was illusory as an issue of substantive unconscionability. The distinction is important as the former concerns whether the parties formed a contract and the latter is a defense against its enforcement.

While the determination of whether the entire agreement is unconscionable is reserved for the arbitrator, we may consider whether the agreement was illusory.

(2) A settlement in which a party waives or agrees to forego a claim or right under this chapter or under a rental agreement was unconscionable when made, the court may refuse to enforce the settlement, enforce the remainder of the settlement without the unconscionable provisions, or limit the application of any unconscionable provision to avoid an unconscionable result.

Both Mary’s and Thomas’s appeals are denied and dismissed, the judgment appealed from is affirmed, and the case is remanded to the Superior Court.

The Gormans did not offer any evidence that a private school rule regulating the length of a student’s hair is injurious to the interests of the public, nor that it interferes with the public welfare or safety. This rule clearly does not rise to the level of “unconscionable,” nor does it tend to injustice or oppression.

(a) If the court as a matter of law finds the contract or any clause of the contract to have been unconscionable at the time it was made the court may refuse to enforce the contract, or it may enforce the remainder of the contract without the unconscionable clause, or it may so limit the application of any unconscionable clause as to avoid any unconscionable result. (b) When it is claimed or appears to the court that the contract or any clause thereof may be unconscionable the parties shall be afforded a reasonable opportunity to present evidence as to its commercial setting, purpose and effect to aid the court in making the determination.

We are told that the ultimate question as to whether an agreement is unconscionable is one of law. Id. at § 2.302, cmts. 1 & 3; Pony Express Courier Corp. v. Morris, 921 S.W.2d 817, 820 (Tex.App.—San Antonio 1996, no writ). This suggests that our review of the matter is de novo. Yet, it cannot be forgotten that the decision of whether some agreement is or is not unconscionable is dependent upon the existence of facts which allegedly illustrate unconscionability. And, as to the existence of those facts, our review is not de novo. In other words, we cannot review the record, divine our own inferences from the evidence contained therein, resolve conflicts in same, or decide what evidence to believe and what not to believe. The power to do those things, that is, to find facts, lies with the trial court. Once it has exercised that power, we must then defer to the findings made. And, as long as the findings enjoy sufficient evidentiary support, they cannot be disturbed, even though we may have construed the evidence differently. Nevertheless, this does not prevent us from assessing whether the findings made illustrate unconscionability for, again, that is a question of law.

Unless the context otherwise requires, this chapter applies to transactions in goods; it does not apply to any transaction which although in the form of an unconditional contract to sell or present sale is intended to operate only as a security transaction nor does this chapter impair or repeal any statute regulating sales to consumers, farmers or other specified classes of buyers.

In determining whether a contract is unconscionable, we use a two-pronged analysis. See Sosa v. Paulos, 924 P.2d 357, 360 (Utah 1996). The first prong — substantive unconscionability — focuses on the agreement's contents. The second prong — procedural unconscionability — focuses on the formation of the agreement.

We have acknowledged that substantive unconscionability alone may support a finding of unconscionability but that procedural unconscionability without any substantive imbalance will rarely render a contract unconscionable.

If the court as a matter of law finds the contract or any clause of the contract to have been unconscionable at the time it was made the court may refuse to enforce the contract, or it may enforce the remainder of the contract without the unconscionable clause, or it may so limit the application of any unconscionable clause as to avoid any unconscionable result.

When it is claimed or appears to the court that the contract or any clause thereof may be unconscionable the parties shall be afforded a reasonable opportunity to present evidence as to its commercial setting, purpose and effect to aid the court in making the determination.

We now apply each prong of the unconscionability test to Ryan's claim. Substantive unconscionability focuses on "the contents of an agreement, examining the `relative fairness of the obligations assumed.'" Id. (quoting Resource Management, 706 P.2d at 1043 ). In determining substantive unconscionability, we consider whether a contract's terms are "so one-sided as to oppress or unfairly surprise an innocent party or whether there exists an overall imbalance in the obligations and rights imposed by the bargain ... according to the mores and business practices of the time and place." Id. (internal quotations and citations omitted). Even if a contract term is unreasonable or more advantageous to one party, the contract, without more, is not unconscionable — the terms must be "so one-sided as to oppress ... an innocent party."

Turning to the procedural unconscionability prong, we conclude that no procedural unconscionability was present. Procedural unconscionability focuses on the negotiation of the contract and the circumstances of the parties. Sosa, 924 P.2d at 362 . Our principle inquiry is whether there was overreaching by a contracting party occupying an unfairly superior bargaining position. Cf. id.; American Food Management, Inc. v. Henson, 105 Ill.App.3d 141 , 61 Ill.Dec. 122 , 434 N.E.2d 59, 63 (Ill.App.Ct. 1982). Factors bearing on procedural unconscionability include: (1) whether each party had a reasonable opportunity to understand the terms and conditions of the agreement; (2) whether there was a lack of opportunity for meaningful negotiation; (3) whether the agreement was printed on a duplicate or boilerplate form drafted solely by the party in the strongest bargaining position; (4) whether the terms of the agreement were explained to the weaker party; (5) whether the aggrieved party had a meaningful choice or instead felt compelled to accept the terms of the agreement; and (6) whether the stronger party employed deceptive practices to obscure key contractual provisions.

We conclude that the acknowledgment form, which provided that Ryan was an at-will employee, is not substantively unconscionable. The at-will employment arrangement gives employers and employees the same right — the right to terminate the relationship *403 at any time, for any reason. And while the law places some limits on an employer's ability to terminate an at-will relationship, such as public policy, it does not place similar limitations on employees.

Next, Management Enterprises argues that the trial court erred by holding that the release agreement is unconscionable and, therefore, null and void and that Thorncroft is entitled to recover the $15,000 payment made to Management Enterprises. We stated in Smyth Brothers v. Beresford, 128 Va. 137 , 104 S.E. 371 (1920), the principles that we apply when determining whether a contract is unconscionable: While the jurisdiction undoubtedly exists in the courts to avoid a contract on the ground that it makes an unconscionable bargain, nevertheless an inequitable and unconscionable bargain has been defined to be ‘one that no man in his senses and not under a delusion would make, on the one hand, and as no fair man would accept, on the other.’ The inequality must be so gross as to shock the conscience.

Even though the trial court considered Thorncroft’s payment of $15,000 to Management Enterprises in return for its release of these rights as exorbitant, the record does not reveal an inequality so gross as to shock the conscience. Accordingly, we hold that the release is not unconscionable.

As we have already observed, the “hunting lease” gave Management Enterprises the right to hunt, fish, and trap on Thorn-croft’s property for 32 years. Additionally, the “hunting lease” conferred upon Management Enterprises numerous other rights including: the right to chain, lock, erect barriers or other movement restrictors on the property; the right to erect blinds on the property; and, the right to use rights of way, roads, and low water boundaries. Thorncroft recognized that Management Enterprises would “expend substantial money and resources to develop and manage a game program on the [property].” Also, Thorncroft agreed that it would not give permission to “individuals, groups of individuals, clubs or corporations to hunt, fish, or trap” on the property during the term of the “hunting lease.”

In view of our holdings, we will reverse the judgment and remand the matter for further proceedings because the trial court did not decide whether Thorncroft was entitled to the remedy of *474 rescission of the “hunting lease” on the basis of fraud and duress as alleged in its pleadings.

If Thorncroft is not entitled to rescission of the “hunting lease,” then the release agreement shall be binding upon the parties. Reversed and remanded.

In Washington, either substantive or procedural unconscionability is sufficient to void a contract. Adler v. Fred Lind Manor, 153 Wn.2d 331, 347 , 103 P.3d 773 (2004). Here, only substantive unconscionability is alleged.

A term is substantively unconscionable where it is “ ‘one-sided or overly harsh,’ ” “ ‘[s] hocking to the conscience,’ ” “ ‘monstrously harsh,’ ” or “ ‘exceedingly calloused.’

We agree with the Arizona Supreme Court. In some instances, individual contractual provisions may be so one-sided and harsh as to render them substantively unconscionable despite the fact that the circumstances surrounding the parties’ agreement to the contract do not support a finding of procedural unconscionability. See 2 Restatement (Second) of Contracts § 208 cmt. e (1981) (“Particular terms may be unconscionable whether or not the contract as a whole is unconscionable.”). Accordingly, we *347 now hold that substantive unconscionability alone can support a finding of unconscionability. However, since Adler has yet to prove a valid claim of procedural unconscionability, we decline to consider whether it alone will support a claim of unconscionability.

Two classifications of unconscionability have generally been recognized: (1) substantive unconscionability, involving "those cases where a clause or term in the contract is alleged to be one-sided or overly harsh”; and (2) procedural unconscionability, relating "to impropriety during the process of forming a contract”.

Arbitration. All disputes or claims between the parties related to this Agreement shall be submitted to binding arbitration in accordance with the rules of [the] American Arbitration Association within 30 days from the dispute date or claim. Any arbitration proceedings brought by Client shall take place in Orange County, California. Judgment upon the decision of the arbitrator may be entered into any court having jurisdiction thereof. The prevailing party in any action or proceeding related to this Agreement shall be entitled to recover reasonable legal fees and costs, including attorney’s fees which may be incurred. Severability. If any of the above provisions are held to be invalid or unenforceable, the remaining provisions will not be affected.

Finally, Gandee challenges the 30-day provision. Both sides argue that the provision is ambiguous, potentially operating as either a private statute of limitations or a time frame within which a party must seek to compel arbitration. However, we find no ambiguity in the clause. It requires that “[a] 11 disputes or claims ... be submitted to binding arbitration ... within 30 days from the dispute date or claim.” CP at 75. A plain language reading of this provision indicates that Gandee supposedly had 30 days within which to bring her claim. ¶12 Generally, a private statute of limitations will control over general statutes of limitation “ ‘ “unless prohibited by statute or public policy, or unless [it is] unreasonable.” ’ ” Adler, 153 Wn.2d at 356 (quoting Resp’ts’ *607 Br. at 43 (quoting Ashburn v. Safeco Ins. Co. of Am., 42 Wn. App. 692, 696 , 713 P.2d 742 (1986))). Here, the provision shortens the statute of limitations from the four years provided by the CPA to 30 days. In Adler , we held a shortening of the statute of limitations from three years to 180 days to be substantively unconscionable. Adler, 153 Wn.2d at 355-58 . Consistent with Adler’s holding, we find the statute of limitations provision here to be substantively unconscionable.

A contract provision becomes substantively unconscionable when it eliminates otherwise established statutory rights and is one sided, benefiting the contract drafter, is also not prominently set out in the contract, is not negotiated or bargained for, and provides no benefit to the affected party. Based on this, we hold here that this limitation provision is void and unenforceable. We further hold that under chapter 4.16 RCW, the Tadychs’ suit is timely. We reverse the Court of Appeals and remand for trial.

However, we conclude that the attorney fees and limitations provisions of the arbitration agreement are substantively unconscionable but sever these provisions from the agreement thus preserving the parties’ intent to arbitrate their disputes. We remand to the trial court for determination, consistent with this opinion, of Adler’s claims of procedural unconscionability, including whether Adler implicitly waived his right to a jury trial and the substantive conscionability of the fee-splitting provision.

Nonetheless, we acknowledge that in instances where an employer engages in an “insidious pattern” of seeking to tip the scales in its favor in employment disputes by inserting numerous unconscionable provisions in an arbitration agreement, courts may decline to sever the unconscionable provisions. Ingle, 328 F.3d at 1180 . In this case, however, Adler and Fred Lind Manor’s arbitration agreement contains just two substantively unconscionable provisions. The primary thrust of their agreement is the agreement to arbitrate. Consequently, we can sever the unconscionable attorney fees and limitations provisions *360 without disturbing the primary intent of the parties to arbitrate their disputes.

We affirm the trial court’s denial of the motion to compel arbitration. The arbitration clause itself is so permeated with unconscionable provisions as to make severance impossible. Without an enforceable arbitration clause, the plaintiff cannot be compelled to arbitrate. Accordingly, we remand for further proceedings consistent with this opinion.

Severance is the usual remedy for substantively unconscionable terms, but where such terms “pervade” an arbitration agreement, we “refuse to sever those provisions and declare the entire agreement void.”

This contract’s one-year limitation provision deprives the Tadychs of the six-year statute of limitations established under chapter 4.16 RCW to seek damages for faulty construction.

Thus a sufficient quantum of both procedural and substantive unconscionability exists to render the arbitration provision invalid.

The broad, one-sided, unfair "save and except" parenthetical in the arbitration provision of the loan agreement allowing Wiscónsin Auto Title Loans *523 full access to the courts, free of arbitration, while limiting the borrower to arbitration renders the arbitration provision substantively unconscionable.

If the court as a matter of law finds the contract or any clause of the contract to have been unconscionable at the time it was made the court may refuse to enforce the contract, or it may enforce the remainder of the contract without the unconscionable clause, or it may so limit the application of any unconscionable clause as to avoid any unconscionable result.

When it is claimed or appears to the court that the contract or any clause thereof may be unconscionable the parties shall be afforded a reasonable opportunity to present evidence as to its commercial setting, purpose and effect to aid the court in making the determination.

The following factors render the arbitration provision procedurally unconscionable: Wisconsin Auto Title Loans was in the business of providing loans with automobile titles as collateral and was experienced in drafting such loan agreements; Wisconsin Auto Title Loans was in a position of substantially greater bargaining power than the borrower; the borrower was indigent and in need of cash; and the loan agreement was an adhesion contract presented to the borrower on a take-it-or-leave-it basis.

Wisconsin Auto Title Loans is a Wisconsin corporation that provides short-term loans to consumers.

A settlement in which the customer waives or agrees to forego rights or benefits under chs. 421 to 427 is invalid if the court as a matter of law finds the settlement to be unconscionable at the time it was made. In this regard the court may consider the competence of the customer as measured by his or her education, ability to speak and read the language of the contract, and his or her prior consumer experience; any deception or coercion practiced upon the customer; the nature and extent of the legal advice received by the customer; and the value of the consideration.

For a contract or a contract provision to be declared invalid as unconscionable, the contract or contract provision must be determined to be both procedurally and substantively unconscionable.

A determination of unconscionability requires a mixture of both procedural and substantive unconscionability that is analyzed on a case-by-case basis. 23 The more substantive unconscionability present, the less procedural unconscionability is re *534 quired, and vice versa. 24 A court will weigh all the elements of unconscionability and may conclude uncon-scionability exists because of the combined quantum of procedural and substantive unconscionability.

Fourth, a party seeking to invalidate a provision in a contract (here the borrower) has the burden of proving facts that justify a court's reaching the legal conclusion that the provision is invalid.

While we appreciate that a one-sided arbitration provision may not be unconscionable under the facts of all cases, we conclude that the overly one-sidedness of the arbitration provision at issue in the instant case renders the arbitration provision substantively unconscionable.

Although an evidentiary hearing is ordinarily required as a basis for the necessary findings of fact, an evidentiary hearing may not always be necessary to support a determination of unconscionability.

The circuit court also based its decision on Wis. Stat. § 402.302 (1) (2003-04), the unconscionability provision of Article 2 of the Wisconsin Uniform Commercial Code (U.C.C.) statute. Article 2 of the U.C.C. does not apply to the contract in the present case.