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Community Property • Altering Character of Assets by Agreement
CPROP#036
Legal Definition
Unconscionability claims divide into (1) those involving spousal support, and (2) those involving anything else. Unconscionability is a question of law to be decided by the court (not the jury).
Plain English Explanation
At its core, the rule recognizes that sometimes, one party to a contract has way more power, so they force the weaker party to agree to really unfair terms. This super unfairness is called "unconscionability."
There are two types of unconscionability claims. One is if the unfair term relates to spousal support after a divorce. The other is for any other unfair contract term.
In both situations, judges want to step in fix things when one party gets duped into a stupidly unfair deal. They don't want the stronger party exploiting the weaker one.
Importantly, the judge is the one who decides if a contract is unconscionable, not the jury. Judges are seen as more knowledgeable on what makes a contract term fair or unfair from a legal perspective.
There are two types of unconscionability claims. One is if the unfair term relates to spousal support after a divorce. The other is for any other unfair contract term.
In both situations, judges want to step in fix things when one party gets duped into a stupidly unfair deal. They don't want the stronger party exploiting the weaker one.
Importantly, the judge is the one who decides if a contract is unconscionable, not the jury. Judges are seen as more knowledgeable on what makes a contract term fair or unfair from a legal perspective.
Hypothetical
Hypo 1: Bob and Amy sign a prenuptial agreement where Amy, who doesn't have her own lawyer, agrees to receive a one-time payment of $10,000 in the event of a divorce. Bob's annual income is $600,000. Years later, they divorce. Amy challenges the fairness of the prenuptial agreement in court. Result: The court reviews the agreement and finds it grossly unfair to Amy given Bob's high income and the living standard they maintained. The judge rules the prenup unconscionable and orders a more equitable settlement.
Hypo 2: Before marrying, Bob, who has a net worth of $3 million, and Amy sign a prenup stating that Amy would only receive $5,000 if they divorced. At divorce, Amy disputes this in court, arguing she was pressured to sign without understanding the implications. Result: The court finds the prenup significantly unfair to Amy, especially considering the circumstances under which it was signed. The judge declares the prenup unconscionable and revises the settlement terms.
Hypo 4: Bob and Amy, both successful professionals with similar incomes, sign a prenuptial agreement where, in the event of a divorce, each would keep their own earnings and assets without any spousal support. They both had independent legal advice while drafting this agreement. Years later, they divorce, and Amy challenges the prenup, arguing it's unfair. Result: The court examines the prenup and finds it was entered into by both parties with full understanding and independent legal advice, and it fairly reflects their similar financial statuses. The judge rules the prenup is not unconscionable and upholds it, demonstrating a scenario where the unconscionability rule does not apply due to the equitable nature of the agreement and the circumstances under which it was signed.
Hypo 2: Before marrying, Bob, who has a net worth of $3 million, and Amy sign a prenup stating that Amy would only receive $5,000 if they divorced. At divorce, Amy disputes this in court, arguing she was pressured to sign without understanding the implications. Result: The court finds the prenup significantly unfair to Amy, especially considering the circumstances under which it was signed. The judge declares the prenup unconscionable and revises the settlement terms.
Hypo 4: Bob and Amy, both successful professionals with similar incomes, sign a prenuptial agreement where, in the event of a divorce, each would keep their own earnings and assets without any spousal support. They both had independent legal advice while drafting this agreement. Years later, they divorce, and Amy challenges the prenup, arguing it's unfair. Result: The court examines the prenup and finds it was entered into by both parties with full understanding and independent legal advice, and it fairly reflects their similar financial statuses. The judge rules the prenup is not unconscionable and upholds it, demonstrating a scenario where the unconscionability rule does not apply due to the equitable nature of the agreement and the circumstances under which it was signed.
Related Concepts
Are California spouses bound by community property rules against their will?
Can parties agree to limit child support in a prenuptial agreement?
What are the defenses to enforcement of a prenuptial agreement?
What are the requirements for a prenuptial agreement to be deemed signed voluntarily?
What are the requirements for a proper prenuptial agreement, and what are the exceptions?
What happens to terms within a prenuptial agreement that are deemed to promote divorce?
