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Unconscionable Terms Prevent Enforceability of e-Commerce Contract Clauses

By Jonathan Bick
June 26, 2008

e-Commerce, like traditional commerce, relies on contracts. But unlike traditional commerce, e-commerce typically relies utterly on agreements drafted and presented by one party on a 'take-it-or-leave-it' basis. The validity of such contracts arises from the recipient's 'adherence' to the terms given. These so-called adhesion contracts are enforceable, except to the extent that a court finds a term unconscionable.

Of an increasing degree of comfort to consumers, but an increasing degree of discomfort to e-commerce entrepreneurs and their counsel, however, is that courts are discovering unconscionable e-commerce contract clauses and refusing to enforce them.

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