Opinion ID: 1043281
Heading Depth: 3
Heading Rank: 3

Heading: Unconscionability as Defense to the Contract

Text: Ejaz claims that Bose's lawyers used heavy-handed tactics to get him, unrepresented by counsel, to sign the Settlement Agreement. Unconscionability is an affirmative defense, placing -9- the burden of proof on Ejaz. See E.H. Ashley & Co., Inc. v. Wells Fargo Alarm Servs., 907 F.2d 1274, 1278 (1st Cir. 1990). Under Massachusetts law, unconscionability requires a two-part inquiry, in which the defendant must prove both procedural and substantive unconscionability. Trans-Spec Truck Serv., Inc. v. Caterpillar Inc., 524 F.3d 315, 329 (1st Cir. 2008) (quoting Zapatha v. Dairy Mart, Inc., 408 N.E.2d 1370, 1377 n.13 (Mass. 1980)) (internal quotation marks omitted). The evidence does not show substantive unconscionability as to the making of the contract here. We discuss later the discrete issue of the liquidated damages clause. Contracts are substantively unconscionable if they show a gross disparity in consideration that makes them facially unfair. E.g. Waters v. Min Ltd., 587 N.E.2d 231, 234 (Mass. 1992) (finding gross disparity where annuity with $189,000 immediate cash value was sold for $50,000, and citing as unconscionable another case in which a trust interest worth $1,100,000 was sold for $66,000). The record in this case shows that, at the time he signed the agreement, Ejaz understood that he would be relieved of legal liability that could have reached $250,000 in the U.K. litigation alone.3 Because the 3 The record is unclear as to whether the $250,000 figure refers specifically to the U.K. litigation, which was addressed in the Consent Order. But that distinction is immaterial, because the Settlement Agreement settled all claims, including those covered by the Consent Order, and incorporated the Consent Order within its terms. -10- financial benefit for him was at least a quarter of a million dollars in liability avoided, no reasonable factfinder could conclude that Ejaz has met his burden of proof in his attempt to establish unconscionability.