Court Opinion

ID: 9771885
Source: CourtListenerOpinion
Date Created: 2023-08-29 16:57:45.775022+00
Date Added: 2024-06-11T07:31:39.037862
License: Public Domain

On Motion for Rehearing
In its motion for rehearing, supported by able amicus curiae arguments, Tri-Conti-nental contends that the majority opinion confuses the “doctrine of unconscionable contract,” as stated in the Uniform Commercial Code, with “unconscionable action or course of action” under the Deceptive Trade Practices Act. Arguing that the question of whether a contract is unconscionable must be determined as a matter of law, Tri-Continental contends that the trial court’s finding that the disclaimer provisions in its lease were “onerous, overreaching and against public policy,” constituted a legal conclusion, not a fact finding.
The decision as to whether a contract clause is unconscionable, so that its enforcement should be denied or limited, is a matter of law for the court’s determination. But in making that determination, the court must look to the “entire atmosphere” in which the agreement was made, Wade v. Austin, 524 S.W.2d. 79, 86 (Tex.Civ.App.—Texarkana 1975, no writ). Thus, evidence is admissible to show the commercial setting at the time of the making of the contract. Compare Tex.Bus. & Com.Code Ann. sec. 2.302(b) (Vernon 1968). In deciding the fairness of a contract’s substantive terms, the court must also consider whether there were “procedural abuses,” such as an unfair bargaining position between the parties at the time the agreement was made. Wade v. Austin, 525 S.W.2d at 86; Transamerican Leasing Co. v. Three Bears, Inc., 586 S.W.2d 472 (Tex.1979).
Here, there was evidence from which the trial court could factually have found that the sales agent took “grossly unfair” advantage of Bums’ lack of knowledge to a “grossly unfair degree” and that there was a “glaring and flagrant” difference between the consideration paid by Bums for the copier and the value he actually received. See Chastain v. Koonce, 700 S.W.2d 579, 582-83 (Tex.1985). There was also evidence from which the court could have found that Tri-Continental authorized and ratified the sales agent’s conduct in dealing with Bums. Thus, the trial *610court had sufficient evidentiary basis for a factual determination of unconscionable action or course of action under Tex.Bus. & Com.Code Ann. sec. 17.45(5) (Vernon Supp.1986). Chastain v. Koonce, 700 S.W.2d 579. On the basis of these factual determinations, the trial court could properly have concluded, as a matter of law, that the disclaimer clauses were unconscionable under the circumstances present when the contract was made. Tex.Bus. & Com.Code Ann. sec. 2.302 comment 1 (Vernon 1968) and authorities cited therein. Having decided that the contractual disclaimer clauses were unconscionable, the trial court acted within its discretion in denying their enforcement in the instant case. Sec. 2.302 comment 2.
Our holding in this case does not constitute a general condemnation of the contract clauses in question, and in this respect we adhere to our previous holding in Southwest Park Outpatient Surgery, Ltd. v. Chandler Leasing Division, 572 S.W.2d 53 (Tex.Civ.App.—Houston [1st Dist.] 1978, no writ).
The motion for rehearing is overruled.
DUGGAN, J., also participating.
LEVY, J., dissents.