Courts assess whether an arbitration agreement is unconscionable by evaluating its terms for fairness and balance between parties. This often involves examining both procedural and substantive elements—procedural looks at the circumstances of how the contract was made, while substantive examines the terms themselves and their potential to be overly harsh or one-sided.
For example: An arbitration agreement might be deemed unconscionable if it was presented as a non-negotiable term in fine print, coupled with exorbitant fees for initiating arbitration, thereby placing an unfair burden on one party over the other.