What is an Unconscionable Act in Personal Injury Law?

Most often used with the Texas Deceptive Trade Practices Act and limited to economic outcomes associated with commercial transactions, an Unconscionable Act is “an act of practice, which to a consumer’s detriment, takes advantage of the lack of knowledge, ability, or capacity of the consumer to a grossly unfair degree, resulting in a gross disparity between the value received and the consideration paid.”

So … What does this mean in plain English? It means you got cheated.

An unconscionable act occurs at the time of sale or contract. Determining this involves an objective review of the facts of the case, with consideration for the education, experience and ability of the consumer.

To establish unconscionability, the consumer must establish:

1. A showing of a lack of knowledge, ability, experience, or capacity by the consumer, and
2. That the defendant took advantage of this lack to a grossly unfair degree.

So What Does This Have To Do With Personal Injury Law?

In the context of personal injury law, “unconscionable act” typically refers to an action or term in a settlement or agreement that is so unfairly one-sided that it shocks the conscience of the court and may be deemed unenforceable. It often involves a weaker party being exploited by a stronger party, particularly in situations where the weaker party is vulnerable or lacks independent advice. 

Here are some typical scenarios we see of fraud and “unconscionable acts” cases in Texas:

• Unconscionable Bargain/Agreement: An unconscionable bargain is a contract or agreement that is so unfair to one party that it violates basic principles of fairness and justice. 
• Exploitation of Vulnerability: When one party (usually a stronger party) exploits a weaker party’s vulnerability, such as lack of knowledge, undue influence, or inability to negotiate effectively. 
• Equitable Remedy:The doctrine of unconscionability is an equitable remedy that allows a court to set aside a contract or agreement that is found to be unconscionable. 
• Not Deliberate Wrongdoing: While unconscionability may involve some form of unfair advantage, it doesn’t necessarily require intentional wrongdoing or malice on the part of the stronger party. 
• Shocking the Conscience: The core principle is that the agreement must be so egregious or unfair that it “shocks the conscience” of the court. 

Examples in Personal Injury

• Release Agreements: In a personal injury case, a release agreement (where one party agrees not to sue the other) can be found unconscionable if it was obtained under duress, with misleading information, or when the person signing the release was particularly vulnerable. 
• Settlements: Similarly, a settlement agreement might be deemed unconscionable if it unfairly benefits one party at the expense of the other, especially if the weaker party was not fully aware of their rights or the full extent of their injuries. 
• Exculpatory Clauses: Clauses in contracts that release a party from liability for negligence or even intentional harm can be deemed unconscionable, particularly if they are not clearly presented or the weaker party had little opportunity to negotiate them. 

In essence, unconscionable acts in personal injury law are actions or terms that are so unfair and exploitative that they violate the basic principles of fairness and justice, leading to the potential invalidation of the agreement or contract.