1. Uniform Commercial Code › U.C.C. - ARTICLE 2 - SALES (2002) › P.docx

1. Uniform Commercial Code › U.C.C. - ARTICLE 2 - SALES
(2002) › PART 3. GENERAL OBLIGATION AND
CONSTRUCTION OF CONTRACT › § 2-302. Unconscionable
contract or Clause.
§ 2-302. Unconscionable contract or Clause.
(1) If the court as a matter of law finds the contractor any
clause of the contract to have been unconscionable at the time it
was made the court may refuse to enforce the contract, or it may
enforce the remainder of the contract without the
unconscionable clause, or it may so limit the application of any
unconscionable clause as to avoid any unconscionable result.
(2) When it is claimed or appears to the court that the contractor
any clause thereof may be unconscionable the parties shall be
afforded a reasonable opportunity to present evidence as to its
commercial setting, purpose and effect to aid the court in
making the determination.
https://www.law.cornell.edu/ucc/2/2-302
Weaver v. American Oil Company
276 N.E.2d 144 (1971)Supreme Court of Indiana.
ARTERBURN, Chief Justice.
In this case the appellee oil company presented to the appellant-
defendant leasee, a filling station operator, a printed form
contract as a lease to be signed, by the defendant, which
contained, in addition to the normal leasing provisions, a "hold
harmless" clause which provided in substance that the leasee
operator would hold harmless and also indemnify the oil
company for any negligence of the oil company occurring on the
leased premises. The litigation arises as a result of the oil
company's own employee spraying gasoline over Weaver and
his assistant and causing them to be burned and injured on the

leased premises. This action was initiated by American Oil and
Hoffer (Appellees) for a declaratory judgment to determine the
liability of appellant Weaver, under the clause in the lease. The
trial court entered judgment holding Weaver liable under the
lease.
Clause three [3] of the lease reads as follows:
"Lessor, its agents and employees shall not be liable for any
loss, damage, injuries, or other casualty of whatsoever kind or
by whomsoever caused to the person or property of anyone
(including Lessee) on or off the premises, arising out of or
resulting from Lessee's use, possession or operation thereof, or
from defects in the premises whether apparent or hidden, or
from the installation existence, use, maintenance, condition,
repair, alteration, removal or replacement of any equipment
thereon, whether due in whole or in part to negligent acts or
omissions of Lessor, its agents or employees; and Lessee for
himself, his heirs, executors, administrators, successors and
assigns, hereby agrees to indemnify and hold Lessor, its agents
and employees, harmless from and against all claims, demands,
liabilities, suits or actions (including all reasonable expenses
and attorneys' fees incurred by or imposed on the Lessor in
connection therewith) for such loss, damage, injury or other
casualty. Lessee also agrees to pay all reasonable expenses and
attorneys' fees incurred by Lessor in the event that Lessee shall
default under the provisions of this paragraph."
It will be noted that this lease clause not only exculpated the
leasor oil company from its liability for its negligence, but also
compelled Weaver to indemnify them for any damages or loss
incurred as a result of its negligence. The appellate court held
the exculpatory clause invalid, 261 N.E.2d 99, but the
indemnifying clause valid, 262 N.E.2d 663. In our opinion, both
these provisions must be read together since one may be used to
effectuate the result obtained through the other. We find no
ground for any distinction and we therefore grant the petition to
transfer the appeal to this court.
This is a contract, which was submitted (already in printed

form) to a party with lesser bargaining power. As in this case, it
may contain unconscionable or unknown provisions which are
in fine print. Such is the case now before this court.
The facts reveal that Weaver had left high school after one and
a half years and spent his time, prior to leasing the service
station, working at various skilled and unskilled labor oriented
jobs. He was not one who should be expected to know the law
or understand the meaning of technical *146 terms. The
ceremonious activity of signing the lease consisted of nothing
more than the agent of American Oil placing the lease in front
of Mr. Weaver and saying "sign", which Mr. Weaver did. There
is nothing in the record to indicate that Weaver read the lease;
that the agent asked Weaver to read it; or that the agent, in any
manner, attempted to call Weaver's attention to the "hold
harmless" clause in the lease. Each year following, the
procedure was the same. A salesman, from American Oil, would
bring the lease to Weaver, at the station, and Weaver would sign
it. The evidence showed that Weaver had never read the lease
prior to signing and that the clauses in the lease were never
explained to him in a manner from which he could grasp their
legal significance. The leases were prepared by the attorneys of
American Oil Company, for the American Oil Company, and the
agents of the American Oil Company never attempted to explain
the conditions of the lease nor did they advise Weaver that he
should consult legal counsel, before signing the lease. The
superior bargaining power of American Oil is patently obvious
and the significance of Weaver's signature upon the legal
document amounted to nothing more than a mere formality to
Weaver for the substantial protection of American Oil.
Had this case involved the sale of goods it would have been
termed an "unconscionable contract" under sec. 2-302 of the
Uniform Commercial Code as found in Burns' Ind. Stat. sec. 19-
2-302, IC 1971, XX-X-X-XXX. The statute reads as follows:
"19-2-302. Unconscionable contract or clause. If the court as a
matter of law find the contract or any clause of the contract to
have been unconscionable at the time it was made the court may

refuse to enforce the contract, or it may enforce the remainder
of the contract without the unconscionable clause, or it may so
limit the application of any unconscionable clause as to avoid
any unconscionable result. (2) When it is claimed or appears to
the court that the contract or any clause thereof may be
unconscionable the parties shall be afforded a reasonable
opportunity to present evidence as to its commercial setting,
purpose and effect to aid the court in making the determination.
(Acts 1963, ch. 317, sec. 2-302 p. 539)"
According to the Comment to Official Text, the basic test of
unconscionability is whether, in light of the general commercial
background and the commercial needs of the particular trade or
case, the clauses involved are so one-sided as to be
unconscionable under the circumstances existing at the time of
the making of the contract. Subsection two makes it clear that it
is proper for the court to hear evidence upon these questions.
"An `unconscionable contract' has been defined to be such as no
sensible man not under delusion, duress or in distress would
make, and such as no honest and fair man would accept. There
exists here an `inequality so strong, gross and manifest that it is
impossible to state it to a man of common sense without
producing an exclamation at the inequality of it.' `Where the
inadequacy of the price is so great that the mind revolts at it the
court will lay hold on the slightest circumstances of oppression
or advantage to rescind the contract.'" "It is not the policy of
the law to restrict business dealings or to relieve a party of his
own mistakes of judgment, but where one party has taken
advantage of another's necessities and distress to obtain an
unfair advantage over him, and the latter, owing to his
condition, has encumbered himself with a heavy liability or an
onerous obligation for the sake of a small or inadequate present
gain, there will be relief granted." Stiefler v. McCullough
(1933), 97 Ind. App. 123, 174 N.E. 823.
The facts of this case reveal that in exchange for a contract
which, if the clause *147 in question is enforceable, may cost
Mr. Weaver potentially thousands of dollars in damages for

negligence of which he was not the cause, Weaver must operate
the service station seven days a week for long hours, at a total
yearly income of $5,000-$6,000. The evidence also reveals that
the clause was in fine print and contained no title heading which
would have identified it as an indemnity clause. It seems a
deplorable abuse of justice to hold a man of poor education, to a
contract prepared by the attorneys of American Oil, for the
benefit of American Oil which was presented to Weaver on a
"take it or leave it basis".
Justice Frankfurter of the United States Supreme Court spoke on
the question of inequality of bargaining power in his dissenting
opinion in United States v. Bethlehem Steel Corp. (1942), 315
U.S. 289, 326, 62 S. Ct. 581, 599, 86 L. Ed. 855, 876.
"(I)t is said that familiar principles would be outraged if
Bethlehem were denied recovery on these contracts. But is there
any principle which is more familiar or more firmly embedded
in the history of Anglo-American law than the basic doctrine
that the courts will not permit themselves to be used as
instruments of inequity and injustice? Does any principle in our
law have more universal application than the doctrine that
courts will not enforce transactions in which the relative
positions of the parties are such that one has unconscionably
taken advantage of the necessities of the other?" "These
principles are not foreign to the law of contracts. Fraud and
physical duress are not the only grounds upon which courts
refuse to enforce contracts. The law is not so primitive that it
sanctions every injustice except brute force and downright
fraud. More specifically, the courts generally refuse to lend
themselves to the enforcement of a `bargain' in which one party
has unjustly taken advantage of the economic necessities of the
other. * * *"
The traditional contract is the result of free bargaining of
parties who are brought together by the play of the market, and
who meet each other on a footing of approximate economic
equality. In such a society there is no danger that freedom of
contract will be a threat to the social order as a whole. But in

present-day commercial life the standardized mass contract has
appeared. It is used primarily by enterprises with strong
bargaining power and position. The weaker party, in need of the
good or services, is frequently not in a position to shop around
for better terms, either because the author of the standard
contract has a monopoly (natural or artificial) or because all
competitors use the same clauses.
Judge Frankfurter's dissent was written nearly twenty years ago.
It represents a direction and philosophy which the law, at that
time was taking and is now compelled to accept in our modern
society over the old principle known as the parole evidence
rule. The parole evidence rule states that an agreement or
contract, signed by the parties, is conclusively presumed to
represent an integration or meeting of the minds of the parties.
This is an archaic rule from the old common law. The
objectivity of the rule has as its only merit its simplicity of
application which is far outweighed by its failure in many cases
to represent the actual agreement, particularly where a printed
form prepared by one party contains hidden clauses unknown to
the other party is submitted and signed. The law should seek the
truth or the subjective understanding of the parties in this more
enlightened age. The burden should be on the party submitting
such "a package" in printed form to show that the other party
had knowledge of any unusual or unconscionable terms
contained therein. The principle should be the same as that *148
applicable to implied warranties, namely that a package of
goods sold to a purchaser is fit for the purposes intended and
contains no harmful materials other than that represented.
Caveat lessee is no more the current law than caveat emptor.
Only in this way can justice be served and the true meaning of
freedom of contract preserved. The analogy is rational. We have
previously pointed out a similar situation in the Uniform
Commercial Code, which prohibits unconscionable contract
clauses in sales agreements.
When a party can show that the contract, which is sought to be
enforced, was in fact an unconscionable one, due to a

prodigious amount of bargaining power on behalf of the
stronger party, which is used to the stronger party's advantage
and is unknown to the lesser, party, causing a great hardship
and risk on the lesser party, the contract provision, or the
contract as a whole, if the provision is not separable, should not
be enforceable on the grounds that the provision is contrary to
public policy. The party seeking to enforce such a contract has
the burden of showing that the provisions were explained to the
other party and came to his knowledge and there was in fact a
real and voluntary meeting of the minds and not merely an
objective meeting.
Unjust contract provisions have been found unenforceable, in
the past, on the grounds of being contrary to public policy,
where a party has a greater superior bargaining position. In
Pennsylvania Railroad Co. v. Kent (1964), 136 Ind. App.
551, 198 N.E.2d 615, Judge Hunter, speaking for the court said
that although the proposition that "parties may enter into such
contractual arrangement as they may desire may be conceded in
the general sense; when, however, such special agreement may
result in affecting the public interest and thereby contravene
public policy, the abrogation of the rules governing common
carriers must be zealously guarded against."
We do not mean to say or infer that parties may not make
contracts exculpating one of his negligence and providing for
indemnification, but it must be done knowingly and willingly as
in insurance contracts made for that very purpose.
It is the duty of the courts to administer justice and that role is
not performed, in this case, by enforcing a written instrument,
not really an agreement of the parties as shown by the evidence
here, although signed by the parties. The parole evidence rule
must yield to the equities of the case. The appeal is transferred
to this court and the judgment of the trial court is reversed with
direction to enter judgment for the appellant.
PRENTICE, Judge (dissenting).
My opinion is diametrically opposed to those of both the
majority herein and of the Appellate Court as set forth in 261

N.E.2d 99, and 262 N.E.2d 663. There is no law to support the
decisions of the Appellate Court and, since I contend there are
no facts to support the majority opinion of this Court, it,
therefore, is necessary to burden this record by setting forth not
only the special findings of fact of the trial court but also to
add, arguendo, the additional findings that the defendant
(appellant) contends were either admitted or proved.
The facts, as found specially by the trial court were as follows:
"1. That the plaintiff, American Oil Company, is a corporation
organized and existing under and by virtue of the laws of the
State of Maryland and is licensed and authorized to do business
within the State of Indiana and was so licensed and authorized
to do business within the State of *149 Indiana on the 5th day
of September, 1961 to and including the 27th day of April,
1962.
2. That Homer Hoffer was on the 27th day of April, 1962, an
agent and employee of American Oil Company.
3. That the defendant, Howard Weaver, was on the 5th day of
September, 1961, an adult over the age of 21 years and was able
to read and write and had been operating a filling station since
1956.
4. That on or about the 5th day of September, 1961, the
plaintiff, American Oil Company, and the defendant, Howard
Weaver, did enter into a certain written lease which is attached
to the plaintiffs' complaint and designated as `Exhibit A', for
the lease of a certain filling station and equipment known as
lots number 346 and 347 as shown on the recorded plat of
Beiger Farm, 5th Addition to the City of Mishawaka, St. Joseph
County, State of Indiana, commonly known and described as
2000 Lincolnway East, Mishawaka, Indiana; and that under the
terms of said lease the plaintiff, American Oil Company, was
the lessor and the defendant, Howard Weaver, the lessee of said
above described premises and equipment and that there was
contained in said lease the following numerical paragraph 3:
`Lessor, its agents and employees shall not be liable for any
loss, damage, injuries, or other casualty of whatsoever kind or

by whomsoever caused, to the person or property of anyone
(including lessee) on or off the premises, arising out of or
resulting from Lessee's use, possession or operation thereof, or
from defects in the premises whether apparent or hidden, or
from the installation, existence, use, maintenance, condition,
repair, alteration, removal or replacement of any equipment
thereon, whether due in whole or in part to negligent acts or
omissions of Lessor, its agents or employees; and Lessee for
himself, his heirs, executors, administrators, successors and
assigns, hereby agrees to indemnify and hold Lessor, its agents
and employees, harmless from and against all claims, demands,
liabilities, suits or actions (including all reasonable expenses
and attorneys' fees incurred by or imposed on the Lessor in
connection therewith) for such loss, damage, injury or other
casualty, Lessee also agrees to pay all reasonable expenses and
attorneys' fees incurred by Lessor in the event that Lessee shall
default under the provisions of this paragraph.'
5. That on or about the 27th day of April, 1962 said lease,
including numerical paragraph 3 as quoted in finding number 4
above, between American Oil Company and Howard Weaver
was in full force and effect and was a valid enforceable lease
and contract by and between the parties.
6. That on or about the 27th day of April, 1962 the plaintiff,
Homer Hoffer, as the agent, servant and employee of the
plaintiff, American Oil Company, went on the premises which
was the subject matter of said lease between American Oil
Company and Howard Weaver for the purpose of repairing
certain gasoline pumps located thereon and that during the
repair of said gasoline pumps and the demonstration thereof
gasoline was sprayed over and about the person of the
defendant, Howard Weaver, and his employee, Donald Miller,
causing each of them to be burned and to suffer certain personal
injuries.
7. That claims for damages and personal injuries have been
made against the plaintiffs, American Oil Company and Homer
Hoffer, and lawsuits filed for the collection of such damages in

the St. Joseph Circuit Court, known as Howard J. Weaver vs.
Homer Hoffer and American Oil Company, known as Cause No.
C-1864, and in the St. Joseph Superior Court, known as Donald
Miller vs. Homer Hoffer and American Oil Company, known as
Cause No. C-1955. That said complaints seek the recovery of
damages for personal injuries allegedly suffered and sustained
by Donald Miller and the defendant herein, Howard Weaver, by
reason of alleged negligence of the plaintiffs herein, American
Oil Company and Homer Hoffer.
*150 8. That the plaintiffs have tendered to the defendant,
Howard Weaver, herein the defense of each of said above
described lawsuits and have demanded that Howard Weaver
hold the plaintiffs, American Oil Company and its agent,
servant and employee, Homer Hoffer, harmless against said
claims and lawsuits and have also demanded that Howard
Weaver assume the defense of American Oil Company and
Homer Hoffer in said lawsuits and claims pursuant to numerical
paragraph 3 of said lease which was in full force and effect on
the 27th day of April, 1962, the date of the alleged incident
which resulted in the injuries to Howard Weaver and Donald
Miller and is the subject matter of said pending lawsuits.
9. That the defendant, Howard Weaver, has refused to hold the
plaintiffs, American Oil Company and Homer Hoffer, harmless
from said claims or to assume the defense of American Oil
Company and Homer Hoffer in the lawsuits brought against
them.
10. That an actual existing justifiable controversy exists
between the parties hereto having adverse legal interests which
controversy is as follows:
a. The plaintiffs claim that by virtue of the terms contained in
said written lease entered into by and between the parties on the
5th day of September, 1961 which was in full force and effect
on or about the 27th day of April, 1962 which said written lease
is designated as Exhibit A. attached to the plaintiffs' complaint
and which was offered and introduced into evidence as
plaintiffs' Exhibit 1, and in particular numerical paragraph 3

thereof, the defendant, Howard Weaver, is obligated to
undertake the defense of the plaintiffs and to hold the plaintiffs
harmless from any and all expenses, costs of suit, legal fees,
damages, judgments and to reimburse the plaintiffs for the
defense costs heretofore incurred as a result of the defendant's
refusal to assume the defense of the plaintiffs in the following
claims and lawsuits presently pending:
Howard J. Weaver vs. Homer Hoffer and American Oil
Company, known as Cause No. C-1864, St. Joseph Circuit
Court.
Donald Miller vs. Homer Hoffer and American Oil Company,
known as Cause No. C-1955, St. Joseph Superior Court,
and to reimburse said plaintiffs for any payments, expenses,
costs, including but not limited to attorneys' fees, which may
have been incurred or paid as a result of said claims and
pending lawsuits.
b. The defendant, Howard Weaver, claims that he is not
obligated to defend the plaintiffs in said causes of actions or to
represent the plaintiffs in said actions or to hold the plaintiffs
harmless from any and all judgments, costs of suit, legal fees,
damages, judgments or any other claims or awards which may
be obtained in any said pending actions or to reimburse the
plaintiffs for the defense costs heretofore incurred by reason of
the terms of the written lease which is attached to the plaintiffs'
complaint and designated as Exhibit A which has been admitted
into evidence in this cause designated as plaintiffs' Exhibit 1.
11. That there is an actual existing controversy between the
parties hereto which will result in protracted litigation unless
resolved and determined by this Court in this action by the
construction of the legal terms, duties and obligations of the
parties hereto pursuant to the terms and obligations of said
written lease and in particular numerical paragraph 3 thereof."
The facts assumed arguendo are the following:
"A. That on or about the 1st day of August, 1956, the defendant
Howard Weaver, as lessee, entered into a written lease with
plaintiff American Oil Company, as lessor, under the terms of

which lease the said Weaver leased a certain filling station and
certain equipment from said defendant for a period of one year,
said filling station and equipment being located at 2000
Lincolnway East in the City of Mishawaka, Indiana, *151 said
premises being legally described as lots numbered 346 and 347
as shown on the recorded plat of Beiger Farm, Fifth Addition, to
the City of Mishawaka, St. Joseph County, State of Indiana.
B. That on or about August 1, 1959, the date the term of said
lease referred to above expired, the said lease was renewed by
the parties for a period of one year; that on or about August 1,
1960, said lease was again renewed for a term of one year; that
on September 5, 1961, said lease was again renewed by lessor
and lessee for a period of one year, the term of said lease
commencing August 1, 1961, and expiring July 31, 1962; that
the original lease dated on or about August 1, 1958, and each
renewal lease, including the lease dated September 5, 1961,
were identical except for the term thereof.
C. That each lease entered into by and between the plaintiff
American Oil Company and the defendant Howard Weaver as
above set forth was on a printed lease form furnished and
prepared by the plaintiff.
D. That the said premises leased by plaintiff American Oil
Company to said Weaver consist of two lots, upon which is
located a building, containing a service room for servicing
motor vehicles and a sales room for the use of lessee Weaver in
the conduct of the business of selling lessor's products and for
the display of said products; the area of land not covered by
said building is paved; that three gasoline pumps are located on
said paved portion of the leased premises, which pumps, when
manually activated electrically pump gasoline from underground
storage tanks into customers' motor vehicles, the said
underground storage tanks have a storage capacity of five
thousand gallons of gasoline; that the exterior of said building
is of a distinctive red, white and blue color design and is the
trademark of all filling stations owned or leased by plaintiff
American Oil Company; that the word `Standard' in large letters

is part of the exterior of said building; that a large `Standard'
sign is on said premises, which sign can be electrically
illuminated at night; that the gasoline pump and other
equipment contain emblems and other names indicating the
same connected with plaintiff American Oil Company or its
parent Standard Oil Company.
E. That the main equipment used in the operation of said filling
station, including the building, the hydraulic lift and greasing
and lubricating equipment, the lighting equipment, the Standard
Oil Company signs, the air compressor, the gasoline pumps,
except the nozzles on the hoses, and the underground storage
tanks, are all owned by plaintiff and are included in the lease as
a part of the leased premises.
F. That plaintiff American Oil Company is a wholly owned
subsidiary of Standard Oil Company of Indiana, and is
Standard's operating company, marketing Standard Oil
Company products in all states except Alaska and Hawaii
through over twenty-five thousand company owned or leased
retail outlets, said outlets being commonly known as filling
stations; that gasoline and related products for the automotive
trade are marketed by plaintiff through said outlets to millions
of consumers daily, said consumers consisting in the main of
operators of motor vehicles who drive their said vehicles upon
the premises known as filling stations to have said vehicles
serviced and filled with gasoline and petroleum products; that
the plaintiff American Oil Company along with its parent
company Standard Oil Company of Indiana, is one of the largest
refiners and distributors of petroleum products in the world.
G. That said lease agreement, by clause number 2 hereof,
requires the lessee Howard Weaver to keep the equipment,
machinery and appliances in good order and repair; that
notwithstanding said clause number 2, after the execution of the
said lease dated August 1, 1956, and to and including the 27th
day of April, 1962, the plaintiff American Oil Company
assumed the obligation and burden of keeping the said
equipment, machinery and appliances in good order and repair

at American Oil Company's own expense.
*152 H. That during the entire adult life of defendant Howard
Weaver, up to and including the date the first lease between the
plaintiff and defendant Weaver was executed on or about the 1st
day of August, 1956, Howard Weaver had been a laboring man,
working at manual labor as an employee of others; that during
said time he had had no business experience in managing or
operating his own business, nor had to had education or
experience in examining or interpretating lease agreements; that
the defendant Howard Weaver's formal education consists of his
completing nine grades of public school.
I. That when defendant Howard Weaver and plaintiff American
Oil Company entered into the said lease dated August 1, 1956,
he was handed the printed lease agreement by an agent of
plaintiff American Oil Company who requested Weaver to sign
the same, which Weaver did. Weaver did not read the lease, nor
was he requested to read it by plaintiff American Oil Company,
nor did said plaintiff point out to defendant Weaver that clause
number 3 of said lease contained a so-called `save harmless'
provision, and this same procedure was followed as each
subsequent lease was executed by said parties. That defendant
Howard Weaver did not have actual knowledge of the contents
of clause 3 of said lease until after he was injured on April 27,
1962.
J. That defendant Howard Weaver's annual net income from the
operation of the said leased filling station from 1956 to and
including 1961 was between $5,500.00 and $6,500.00.
K. That the indemnity provisions of clause number 3 of said
lease agreement imposed upon defendant Howard Weaver a
potential liability far greater than, and completely out of
proportion to, the benefit flowing to said defendant from said
lease agreement.
L. That the operation and maintenance of a filling station, and
the maintenance of thousands of gallons of gasoline in
underground storage tanks, and the pumping of said gasoline
from said storage tanks through mechanical pumps from below

the ground to above the ground for the use of consumers,
involves risk and danger to the general public.
M. That clause number 2 of said lease required defendant
Howard Weaver to keep the machinery, equipment and
appliances, located on said lease premises, in good order and
repair at Weaver's own expense."
Upon the foregoing, the trial court stated conclusions of law and
rendered judgment for the plaintiffs (appellees). The
conclusions, in substance, were that the law was with the
plaintiffs and that the exculpatory and indemnifying provisions
of the lease between the plaintiff and defendant, American,
were enforceable against the defendant.
The decisions of the Appellate Court would not enforce the
exculpatory agreement upon the theory that, although this Court
has consistently refused to void exculpatory provisions as
contrary to public policy, their burdens being unusual and
considerable, they should not be enforced unless it appears that
the party who assumes the burden under the clause was aware of
it and understood its far reaching implications. The burden of
proving such awareness, or lack of it, would vary depending
upon the relative bargaining positions of the parties. The
indemnity provision, however, was held enforceable, by reason
of the availability of insurance rendering the risk manageable.
The facts as found, are that although the defendant never read
the lease, he had ample opportunity to do so and to obtain
counsel. A general rule in effect not only in Indiana but
elsewhere, is that a person who signs a contract, without
bothering to read the same, will be bound by its terms. Welsh v.
Kelly-Springfield Tire Co. (1938), 213 Ind. 188, 12 N.E.2d 254;
Walb Construction Co. v. Chipman (1931), 202 Ind. 434, 175
N.E. 132; Givan v. Masterson (1898), 152 Ind. 127, 51 N.E.
237; Keller v. Orr (1886), 106 Ind. 406, 7 N.E. 195.
*153 Without regard to whether or not he was aware of its
contents, a person will be relieved of his obligations under a
contract under circumstances falling into two main categories:
(a) where the contract is not enforceable because of occurrences

or omissions (fraud, concealment, etc.) surrounding its
execution and where (2) the contract it not enforceable because
of the nature or subject of the contract (illegality of subject
matter). The Appellate Court would have us recognize a third
category and excuse performance, at least as to harsh
provisions, without a showing that he was aware of and
understood the contract provisions and their implications, with
the burden of proof upon such issues to vary depending upon
the relative bargaining positions of the parties. The objective of
such a rule is laudable, but I think it, nevertheless, totally
unworkable.
The identical clause which Defendant here seeks to avoid was
held not to be against public policy in the case of Loper v.
Standard Oil Co. (1965), 138 Ind. App. 84, 211 N.E.2d 797.
Defendant directs our attention, however, to Henningsen et al.
v. Bloomfield Motors, Inc., et al. (1960), 32 N.J. 358, 161 A.2d
69, 75 A.L.R.2d 1, cited in Am.Jur.2d Contract § 188, where,
according to Defendant, it is said: "It has been held that clauses
limiting liability are given rigid scrutiny by the courts, and will
not be enforced unless the limitation is fairly and honestly
negotiated and understandingly entered into." The Appellate
Court has accepted this statement at face value although there
appears to be no Indiana authority in support of such rule. It has
been given limited application in other jurisdictions and, as
limited, appears to be reasonable and workable. But the
defendant appears to mislead us by failing to complete the
quotation, which is completed as follows: "* * * this is
especially true where the contract involves services of a public
or semipublic nature, but has also been applied in some
controversies involving private contracts, particularly where, as
in the case of a public or semipublic contract the private
contract is the only means one of the parties has of filling an
important need." (Emphasis added). The Henningsen case
involved an action by a consumer against the vendor of an
automobile, wherein the court declined to enforce the provision
of the sales contract that provided that the express warranty was

in lieu of all others expressed or implied. The case has no
application to the issues raised on this appeal. Neither do the
facts as found by the trial court, together with additional facts
mentioned, suggest a disparity of bargaining positions
warranting the application of exceptions to reasonable and well
established rules or offend against my concept of fair business
negotiations. A general disparity of economic or intellectual
positions, while factors to be considered along with others in
such cases, do not, in and of themselves, give one who is
dominant in such attributes an unconscionable advantage in the
particular transaction. Whether or not the contract was
"understandingly entered into" by Defendant, we, of course,
cannot say; but we see nothing to indicate that he was deprived
of the opportunity to understand it by any acts or omissions of
American. It would be a strange, and in my opinion impossible,
rule if one party to a contract were to be held the guardian of
the other and accountable to him for both the advantages he
hoped to gain thereunder and the risks or losses that he may
have failed to consider. Under such a rule, the less one knew of
the provisions of the written contract which he executed, the
better would be his position in the event of later dissatisfaction.
Chief Justice Arterburn, speaking for a majority of this Court,
has concluded that the defendant was in an inferior position
with respect to the lease and treats the lease as we might treat
an adhesion contract. I find justification for neither. An
adhesion contract is one that has been drafted unilaterally by
the dominant party and then presented on a "take it or leave it"
basis to the weaker party, who has no real opportunity to
bargain about its terms. (Restatement 2d, Conflict of Law § 332
a, Comment e) (17 C.J.S. Contracts § 10, p. 581.) *154 Here we
have a printed form contract prepared by American. There was
great disparity between the economic positions of American and
Defendant; and Defendant was a man of limited educational and
business background. However, there is nothing from which we
can find or infer that the printed lease provisions were not
subject to negotiation or that, with respect to this particular

lease, Defendant was not in a bargaining position equal to that
of American. The fact that Defendant did not avail himself of
the opportunity to read the agreement but elected to accept it as
presented does not warrant the inference that his only options
were to "take it or leave it." That the "hold harmless" clause
was or might have been in small print, as suggested by the
majority, can hardly have significance in light of the claim and
finding that the defendant did not read any portion of the
document.
The majority places great reliance upon the dissenting opinion
of Justice Frankfurter in United States v. Bethlehem Steel Corp.
(1942), 315 U.S. 289, 326, 62 S. Ct. 581, 599, 86 L. Ed. 855,
876. I agree that it is a well reasoned opinion and that the
philosophy there expresed has had a great impact upon the
parole evidence rule and rightfully so. However, I find no
similarity between the actual situations under consideration. In
the Bethlehem Steel case, the national security of the United
States hung in the balance while the terms of the contract in
question were negotiated. Although the negotiators for the
government had a theoretical choice between accepting the
proposed contract or taking over the operation, of Bethlehem,
the latter subjected the nation to such grave peril as to amount
to no choice at all. Bethlehem's actions clearly amounted to the
taking of an unconscionable advantage of the circumstances,
and there was ample authority for relieving the government of
the harsh terms thusly coerced. The court there had merely to
apply the fundamental principles of law that the courts will not
enforce a bargain where one party has unconscionably taken
advantage of the necessities and distress of the other. In the
case at bar, the defendant was under no compulsion to act.
There is nothing to indicate that he was motivated by any
purpose other than to improve his own economic position, that
the lease arrangement was to be more beneficial to American
than to him, that he was financially, intellectually or
emotionally incompetent or disadvantaged, that his necessities
or potential distress were in any way involved or that his

bargaining position with respect to this particular transaction,
was not substantially equal to that of American.
The case of the Pennsylvania Railroad Co. v. Kent (1964), 136
Ind. App. 551, 198 N.E.2d 615, has no application, as it was
determined upon an issue of public interest and the rules
governing common carriers. Also, it is clear that the uniform
commercial code sections on sales cited by the majority can
have no application; and Chief Justice Arterburn was careful to
point out that it was referred to only to illustrate the acceptance
of legal philosophies permitting and fostering fair dealings and
substantive justice rather than blind and often unjust adherence
to hard and fast rules. But we have neither the duty nor the right
to abandon established principles whenever, in our judgment, it
is necessary to avert a hardship. And should the Legislature see
fit to vest us with either or both, I question that we have the
requisite wisdom. It is for this reason, I believe, that our
mandate is not simply to administer justice but to do so under
the law. I hold no special interest in preserving the policy of
enforcing indemnity and exculpatory contracts. It may well be
that they should be greatly curtailed. But the majority opinion
does not so hold. Defendant's dilemma does not spring from an
unconscionable advantage taken of him either by deceit of
American or by virtue of a superior bargaining position. It
clearly stems from either an unwillingness or indifference upon
his part to utilize the resources available to him or from a
willingness to assume the risks in exchange for the rewards that
he hoped to gain. Presumably he has had the benefits contracted
for, and the majority decision is *155 a grant of retrospective
unilateral contractual immunity to the careless and speculative
and places a premium upon ignorance. I fear that it will stand as
an invitation to any litigant, who finding himself burdened by
his own contract, will say that he did not understand its
provisions and ask us for relief that we have neither the duty,
right nor wisdom to grant.
I would accept transfer of this cause, set aside the decision of
the Appellate Court, as modified, and affirm the decision of the

trial court.
Embola v. Tuppela
127 Wash. 285
HENRY EMBOLA, Respondent,
v.
JOHN TUPPELA, by his Guardian ad Litem, C. H. Farrell,
Appellant.[1]
No. 18164. Department Two.
December 7, 1923.
Appeal from a judgment of the superior court for King county,
Ronald, J., entered April 16, 1923, upon findings in favor of the
plaintiff, in an action on contract, tried to the court. Affirmed.
Howe, Farrell & Meier and J. H. Cobb, for appellant. Murphy &
Kumm and Charles L. Harris, for respondent.
PEMBERTON, J.—John Tuppela joined the gold seekers’ rush
to Alaska, and, after remaining there a number of years
prospecting, was adjudged insane and committed to an asylum
in Portland, Oregon. Upon [286] his release, after a confinement
of about four years, he found that his mining properties in
Alaska had been sold by his guardian. In May of 1918, Tuppela,
destitute and without work, met respondent at Astoria, Oregon.
They had been close friends for a period of about thirty years.
Respondent advanced money for his support, and in September
brought him to Seattle to the home of Herman Lindstrom, a
brother-in-law of respondent. Tuppela had requested a number
of people to advance money for an undertaking to recover his
mining property in Alaska, but found no one who was willing to
do so. The estimated value of this mining property was about
$500,000. In the month of September, Tuppela made the
following statement to respondent: "You have already let me
have $270. If you will give me $50 more so I can go to Alaska
and get my property back, I will pay you ten thousand dollars
when I win my property." Respondent accepted this offer and
immediately advanced the sum of $50. In January, 1921, after

extended litigation, Tuppela recovered his property. Tuppela,
remembering his agreement with respondent, requested Mr.
Cobb, his trustee, to pay the full amount, and upon his refusal
so to do, this action was instituted to collect the same.
The answer of the appellant denies the contract and alleges that,
if it were made, it is unconscionable, not supported by adequate
consideration, procured through fraud, and is usurious. The
appellant also alleges that the amount advanced did not exceed
$100, and he has paid $150 into the registry of the court for the
benefit of respondent.
The court found in favor of the respondent, and from the
judgment entered, this appeal is taken. It is contended by
appellant that the amount advanced is a loan and therefore
usurious, and that the [287] sum of $300 is not an adequate
consideration to support a promise to repay $10,000. It is the
contention of respondent that the money advanced was not a
loan but an investment; that the transaction was in the nature of
a grubstake contract which has been upheld by this court.
Raymond v. Johnson, 17 Wash. 232, 49 Pac. 492, 61 Am. St.
908; Ranahan v. Gibbons, 23 Wash. 255, 62 Pac. 773; Mack v.
Mack, 39 Wash. 190, 81 Pac. 707; Mattocks v. Great Northern
R. Co., 94 Wash. 44, 162 Pac. 19.
This is not a case wherein respondent advanced money to
carryon prospecting. The money was advanced to enable
appellant to recover his mining property. Appellant had already
been advised by an attorney that he could not recover this
property. The risk of losing the money advanced was as great in
this case as if the same had been advanced under a grubstake
contract. Where the principal sum advanced is to be repaid only
on some contingency that may never take place, the sum so
advanced is considered an investment and not a loan and the
transaction is not usurious. "To constitute usury it is essential
that the principal sum loaned shall be repayable at all events
and not put in hazard absolutely. If it is payable only on some
contingency, then the transaction is not usurious. . . ." 27 R. C.
L. §21, p. 220. The fact that the money advanced was not to be

returned until appellant won his property, a contingency at that
time unlikely to occur, supports the finding that the
consideration was not inadequate.
To the contention that the contract was procured through fraud,
the testimony shows that appellant voluntarily offered to pay
the $10,000, and at the time was of sound and disposing mind
and considered that the contract was fair and to his advantage.
[288] The trial court having found that there was no fraud and
that the contract was not unconscionable, we should uphold
these findings unless the evidence preponderates against them.
Thompson v. Seattle Park Co., 94 Wash. 539, 162 Pac. 994;
Austin v. Union Lumber Co., 95 Wash. 608, 164 Pac. 245;
Mottinger v. Reagan, 96 Wash. 49, 164 Pac. 595; Hayes v.
Hayes, 96 Wash. 125, 164 Pac. 740. We are satisfied that the
evidence supports the findings.
The judgment is affirmed.
MAIN, C.J., MITCHELL, FULLERTON, and BRIDGES, JJ.,
concur.
[1] Reported in 220 Pac. 789.
Williams v. Walker-Thomas Furniture Company, 350 F.2d 445
(D.C. Cir. 1965)
U.S. Court of Appeals for the District of Columbia Circuit - 350
F.2d 445 (D.C. Cir. 1965)
J. SKELLY WRIGHT, Circuit Judge:
Appellee, Walker-Thomas Furniture Company, operates a retail
furniture store in the District of Columbia. During the period
from 1957 to 1962 each appellant in these cases purchased a
number of household items from Walker-Thomas, for which
payment was to be made in installments. The terms of each
purchase were contained in a printed form contract which set
forth the value of the purchased item and purported to lease the
item to appellant for a stipulated monthly rent payment. The
contract then provided, in substance, that title would remain in
Walker-Thomas until the total of all the monthly payments

made equaled the stated value of the item, at which time
appellants could take title. In the event of a default in the
payment of any monthly installment, Walker-Thomas could
repossess the item.
The contract further provided that "the amount of each
periodical installment payment to be made by [purchaser] to the
Company under this present lease shall be inclusive of and not
in addition to the amount of each installment payment to be
made by [purchaser] under such prior leases, bills or
accounts; and all payments now and hereafter made by
[purchaser] shall be credited pro rata on all outstanding leases,
bills and accounts due the Company by [purchaser] at the time
each such payment is made." Emphasis added.) The effect of
this rather obscure provision was to keep a balance due on every
item purchased until the balance due on all items, whenever
purchased, was liquidated. As a result, the debt incurred at the
time of purchase of each item was secured by the right to
repossess all the items previously purchased by the same
purchaser, and each new item purchased automatically became
subject to a security interest arising out of the previous
dealings.
On May 12, 1962, appellant Thorne purchased an item described
as a Daveno, three tables, and two lamps, having total stated
value of $391.10. Shortly thereafter, he defaulted on his
monthly payments and appellee sought to replevy all the items
purchased since the first transaction in 1958. Similarly, on
April 17, 1962, appellant Williams bought a stereo set of stated
value of $514.95.1 She too defaulted shortly thereafter, and
appellee sought to replevy all the items purchased since
December, 1957. The Court of General Sessions granted
judgment for appellee. The District of Columbia Court of
Appeals affirmed, and we granted appellants' motion for leave
to appeal to this court.
Appellants' principal contention, rejected by both the trial and
the appellate courts below, is that these contracts, or at least
some of them, are unconscionable and, hence, not enforceable.

In its opinion in Williams v. Walker-Thomas Furniture
Company, 198 A.2d 914, 916 (1964), the District of Columbia
Court of Appeals explained its rejection of this contention as
follows:
"Appellant's second argument presents a more serious question.
The record reveals that prior to the last purchase appellant had
reduced the balance in her account to $164. The last purchase, a
stereo set, raised the balance due to $678. Significantly, at the
time of this and the preceding purchases, appellee was aware of
appellant's financial position. The reverse side of the stereo
contract listed the name of appellant's social worker and her
$218 monthly stipend from the government. Nevertheless, with
full knowledge that appellant had to feed, clothe and support
both herself and seven children on this amount, appellee sold
her a $514 stereo set.
"We cannot condemn too strongly appellee's conduct. It raises
serious questions of sharp practice and irresponsible business
dealings. A review of the legislation in the District of Columbia
affecting retail sales and the pertinent decisions of the highest
court in this jurisdiction disclose, however, no ground upon
which this court can declare the contracts in question contrary
to public policy. We note that were the Maryland Retail
Installment Sales Act, Art. 83 §§ 128-153, or its equivalent, in
force in the District of Columbia, we could grant appellant
appropriate relief. We think Congress should consider
corrective legislation to protect the public from such exploitive
contracts as were utilized in the case at bar."
We do not agree that the court lacked the power to refuse
enforcement to contracts found to be unconscionable. In other
jurisdictions, it has been held as a matter of common law that
unconscionable contracts are not enforceable.2 While no
decision of this court so holding has been found, the notion that
an unconscionable bargain should not be given full enforcement
is by no means novel. In Scott v. United States, 79 U.S. (12
Wall.) 443, 445, 20 L. Ed. 438 (1870), the Supreme Court
stated:

"* * * If a contract be unreasonable and unconscionable, but not
void for fraud, a court of law will give to the party who sues for
its breach damages, not according to its letter, but only such as
he is equitably entitled to. * * *"3
Since we have never adopted or rejected such a rule,4 the
question here presented is actually one of first impression.
Congress has recently enacted the Uniform Commercial Code,
which specifically provides that the court may refuse to enforce
a contract which it finds to be unconscionable at the time it was
made. 28 D.C.CODE § 2-302 (Supp. IV 1965). The enactment of
this section, which occurred subsequent to the contracts here in
suit, does not mean that the common law of the District of
Columbia was otherwise at the time of enactment, nor does it
preclude the court from adopting a similar rule in the exercise
of its powers to develop the common law for the District of
Columbia. In fact, in view of the absence of prior authority on
the point, we consider the congressional adoption of § 2-302
persuasive authority for following the rationale of the cases
from which the section is explicitly derived.5 Accordingly, we
hold that where the element of unconscionability is present at
the time a contract is made, the contract should not be enforced.
Unconscionability has generally been recognized to include an
absence of meaningful choice on the part of one of the parties
together with contract terms which are unreasonably favorable
to the other party.6 Whether a meaningful choice is present in a
particular case can only be determined by consideration of all
the circumstances surrounding the transaction. In many cases
the meaningfulness of the choice is negated by a gross
inequality of bargaining power.7 The manner in which the
contract was entered is also relevant to this consideration. Did
each party to the contract, considering his obvious education or
lack of it, have a reasonable opportunity to understand the terms
of the contract, or were the important terms hidden in a maze of
fine print and minimized by deceptive sales practices?
Ordinarily, one who signs an agreement without full knowledge
of its terms might be held to assume the risk that he has entered

a one-sided bargain.8 But when a party of little bargaining
power, and hence little real choice, signs a commercially
unreasonable contract with little or no knowledge of its terms, it
is hardly likely that his consent, or even an objective
manifestation of his consent, was ever given to all the terms. In
such a case the usual rule that the terms of the agreement are
not to be questioned9 should be abandoned and the court
should consider whether the terms of the contract are so unfair
that enforcement should be withheld.10
In determining reasonableness or fairness, the primary concern
must be with the terms of the contract considered in light of the
circumstances existing when the contract was made. The test is
not simple, nor can it be mechanically applied. The terms are to
be considered "in the light of the general commercial
background and the commercial needs of the particular trade or
case."11 Corbin suggests the test as being whether the terms
are "so extreme as to appear unconscionable according to the
mores and business practices of the time and place." 1
CORBIN, op. cit. supra Note 2.12 We think this formulation
correctly states the test to be applied in those cases where no
meaningful choice was exercised upon entering the contract.
Because the trial court and the appellate court did not feel that
enforcement could be refused, no findings were made on the
possible unconscionability of the contracts in these cases. Since
the record is not sufficient for our deciding the issue as a matter
of law, the cases must be remanded to the trial court for further
proceedings.
So ordered.
DANAHER, Circuit Judge (dissenting):
The District of Columbia Court of Appeals obviously was as
unhappy about the situation here presented as any of us can
possibly be. Its opinion in the Williams case, quoted in the
majority text, concludes: "We think Congress should consider
corrective legislation to protect the public from such exploitive
contracts as were utilized in the case at bar."
My view is thus summed up by an able court which made no

finding that there had actually been sharp practice. Rather the
appellant seems to have known precisely where she stood.
There are many aspects of public policy here involved. What is
a luxury to some may seem an outright necessity to others. Is
public oversight to be required of the expenditures of relief
funds? A washing machine, e. g., in the hands of a relief client
might become a fruitful source of income. Many relief clients
may well need credit, and certain business establishments will
take long chances on the sale of items, expecting their pricing
policies will afford a degree of protection commensurate with
the risk. Perhaps a remedy when necessary will be found within
the provisions of the "Loan Shark" law, D.C.CODE §§ 26-601 et
seq. (1961).
I mention such matters only to emphasize the desirability of a
cautious approach to any such problem, particularly since the
law for so long has allowed parties such great latitude in
making their own contracts. I dare say there must annually be
thousands upon thousands of installment credit transactions in
this jurisdiction, and one can only speculate as to the effect the
decision in these cases will have.1
I join the District of Columbia Court of Appeals in its
disposition of the issues.
WATERS v. MIN
412 Mass. 64, 1992
LYNCH, J. This case arises from a contract between Gail A.
Waters (plaintiff) and "the DeVito defendants" (defendants),
whereby the plaintiff was to assign her annuity policy having a
cash value of $189,000 to the defendants in exchange for
$50,000. The plaintiff brought suit to rescind the contract on the
ground of unconscionability. Defendant Min Ltd.
counterclaimed seeking declaratory relief and specific
enforcement of the contract. A Superior Court judge, sitting
without a jury, found for the plaintiff, ordered that the annuity

be returned to the plaintiff on repayment of $18,000 with
interest, and dismissed the counterclaim of Min Ltd. The
defendants appealed and we took the matter on our own motion.
We now affirm the judgment.
We summarize the relevant facts from the judge's findings. The
plaintiff was injured in an accident when she was twelve years
old. At the age of eighteen, she settled her claim and, with the
proceeds, purchased the annuity contract in question from the
defendant Commercial Union Insurance Company. When the
plaintiff was twenty-one, she became romantically involved
with the defendant Thomas Beauchemin, an ex-convict, who
introduced her to drugs. Beauchemin suggested that she sell her
annuity contract, introduced her to one of the defendants, and
represented her in the contract negotiations. She was naive,
insecure, vulnerable in contract matters, and unduly influenced
by Beauchemin. The defendants drafted the contract documents
with the assistance of legal counsel, but the plaintiff had no
such representation. At least some portions of the contract were
executed in unusual circumstances: i.e., part of the contract was
signed on the hood of an automobile in a parking lot, part was
signed in a restaurant. The defendants agreed to pay $50,000 for
the annuity policy which would return to them as owners of the
policy $694,000 over its guaranteed term of twenty-five years,
and which had a cash value at the time the contract was
executed of $189,000.
Beauchemin acted for himself and as agent of the defendants.
For example, the defendants forgave a $100 debt of Beauchemin
as deposit for the purchase of the annuity policy. From a
subsequent $25,000 payment, the defendants deducted $7,000
that Beauchemin owed them.
Based on the foregoing, the judge found the contract
unconscionable.
The defendants contend that the judge erred by (1) finding the
contract unconscionable (and by concluding the defendants
assumed no risks and therefore finding the contract oppressive);
(2) refusing them specific performance; and (3) failing to

require the plaintiff to return all the funds received from them.
1. Unconscionability. The defendants argue that the evidence
does not support the finding that the contract was
unconscionable or that they assumed no risks and therefore that
the contract was oppressive. "[W]e may not set aside findings of
fact `unless clearly erroneous, and due regard shall be given to
the opportunity of the trial court to judge of the credibility of
the witnesses.' Mass. R. Civ. P. 52 (a), 365 Mass. 816 (1974)."
First Pa. Mortgage Trust v. Dorchester Sav. Bank, 395 Mass.
614 , 621 (1985). Also, we may not reverse the judge's findings
or conclusions if they are not tainted by an error of law. See
Blackwell v. E.M. Helides, Jr., Inc., 368 Mass. 225 , 226
(1975).
The doctrine of unconscionability has long been recognized by
common law courts in this country and in England. See
Banaghan v. Malaney, 200 Mass. 46 (1908); Boynton v.
Hubbard, 7 Mass. 112 (1810); Kleinberg v. Ratett, 252 N.Y. 236
(1929); Campbell Soup Co. v. Wentz, 172 F.2d 80 (3d Cir.
1948); 14 S. Williston, Contracts Section 1632 (3d ed. 1972),
and cases cited; Leff, Unconscionability and the Code -- The
Emperor's New Clause, 115 U. Pa. L. Rev. 485, 531-533 nn.
184-202 (1967). "Historically, a [contract] was considered
unconscionable if it was `such as no man in his senses and not
under delusion would make on the one hand, and as no honest
and fair man would accept on the other.' Hume v. United States,
132 U.S. 406[, 411] (1889), quoting Earl of Chesterfield v.
Janssen, 38 Eng. Rep. 82, 100 (Ch. 1750). Later, a contract was
determined unenforceable because unconscionable when `the
sum total of its provisions drives too hard a bargain for a court
of conscience to assist.' Campbell Soup Co. v. Wentz, 172 F.2d
80, 84 (3d Cir. 1948)." Covich v. Chambers, 8 Mass. App. Ct.
740 , 750 n.13 (1979).
The doctrine of unconscionability has also been codified in the
Uniform Commercial Code (code), G. L. c. 106, Section 2-302
(1990 ed.), and, by analogy, it has been applied in situations
outside the ambit of the code. See, e.g., Zapatha v. Dairy Mart,

Inc., 381 Mass. 284 , 291 (1980) (termination clause in
franchise agreement not considered unconscionable);
Commonwealth v. DeCotis, 366 Mass. 234 , 242 (1974)
(extraction of resale fees for no rendered services deemed unfair
act or practice under G. L. c. 93A, Section 2 [a]). See also
Meehan v. New England School of Law, 522 F. Supp. 484, 494
(D. Mass. 1981) (applying Zapatha and concluding contract
clause waiving tenure rights not unconscionable because
plaintiff attorney carefully negotiated clear, easily identifiable
language in clause); Scheele v. Mobil Oil Corp., 510 F. Supp.
633, 637 (D. Mass. 1981) (relying on Zapatha to deny
defendant's motion to dismiss where motion claimed code
related only to sale of goods and not mutual termination
agreements). As explained in Bronstein v. Prudential Ins.
Co., 390 Mass. 701 , 708 (1984), "[in Zapatha] the court applied
statutory policy to common law contract issues, which, for
centuries have been within the province of this court."
Accordingly, although we are not here concerned with a sale of
goods or a commercial transaction, Zapatha is instructive on the
principles to be applied in testing this transaction for
unconscionability.
Unconscionability must be determined on a case-by-case basis,
with particular attention to whether the challenged provision
could result in oppression and unfair surprise to the
disadvantaged party and not to allocation of risk because of
"superior bargaining power." Zapatha, supra at 292-293. Courts
have identified other elements of the unconscionable contract.
For example, gross disparity in the consideration alone "may be
sufficient to sustain [a finding that the contract is
unconscionable]," since the disparity "itself leads inevitably to
the felt conclusion that knowing advantage was taken of [one
party]." Jones v. Star Credit Corp., 59 Misc. 2d 189, 192 (N.Y.
Sup. Ct. 1969). See, e.g., Matter of Friedman, 64 A.D.2d 70, 85
(N.Y. 1978) (contract unconscionable because art dealer's
"consideration" inadequate where widow conveyed more than
300 works of art to dealer and received neither the payment of

purchase price nor right to receive a fixed price within a
definite time, only dealer's promise of payment if and when
sales made); Nelson v. Nelson, 57 Wash. 2d 321, 323-324
(1960) (contract found unconscionable where defendant agreed
to exchange equity in her property -- worth more than $4,750 --
for equity in the plaintiff's property valued at $2,750). High
pressure sales tactics and misrepresentation have been
recognized as factors rendering a contract unconscionable.
Industralease Automated & Scientific Equip. Corp. v. R.M.E.
Enters., Inc., 58 A.D.2d 482, 488-490 (N.Y. 1977). If the sum
total of the provisions of a contract drive too hard a bargain, a
court of conscience will not assist its enforcement. Campbell
Soup Co., supra at 84.
The judge found that Beauchemin introduced the plaintiff to
drugs, exhausted her credit card accounts to the sum of $6,000,
unduly influenced her, suggested that the plaintiff sell her
annuity contract, initiated the contract negotiations, was the
agent of the defendants, and benefited from the contract
between the plaintiff and the defendants. The defendants were
represented by legal counsel; the plaintiff was not. See Zapatha,
supra at 294. The cash value of the annuity policy at the time
the contract was executed was approximately four times greater
than the price to be paid by the defendants. For payment of not
more than $50,000 the defendants were to receive an asset that
could be immediately exchanged for $189,000, or they could
elect to hold it for its guaranteed term and receive $694,000. In
these circumstances the judge could correctly conclude the
contract was unconscionable.
The defendants assumed no risk and the plaintiff gained no
advantage. Gross disparity in the values exchanged is an
important factor to be considered in determining whether a
contract is unconscionable. "[C]ourts [may] avoid enforcement
of a bargain that is shown to be unconscionable by reason of
gross inadequacy of consideration accompanied by other
relevant factors." 1 A. Corbin, Contracts Section 128, at 551
(1963 & Supp. 1991). Moreover, an unconscionable contract is

"such as no man in his senses and not under delusion would
make on the one hand, and as no honest and fair man would
accept on the other." Hume v. United States, 132 U.S. 406, 411
(1889), quoting Earl of Chesterfield v. Janssen, supra. See In re
Estate of Vought, 76 Misc. 2d 755 (N.Y. Sur. Ct. 1973)
(assignment of interest in spendthrift trust for $66,000 under
provisions which guaranteed assignees ultimate return of
$1,100,000).
We are satisfied that the disparity of interests in this contract is
"so gross that the court cannot resist the inference that it was
improperly obtained and is unconscionable." In re Estate of
Vought, supra at 760.
2. Amount of repayment order. The defendants also argue that
the judge erred in failing to require the plaintiff to return the
full amount paid by them for the annuity.
The judge's order was consistent with his findings that
Beauchemin was the agent of the defendants, and that the
plaintiff only received $18,000 for her interest in the annuity.
Judgment affirmed.
Wille v. Southwestern Bell Tel. Co.
219 Kan. 755 (1976), Supreme Court of Kansas.
The opinion of the court was delivered by HARMAN, C.:
This appeal presents the question whether an advertiser can
recover damages for negligence or breach of contract from a
telephone company for an omission in the yellow pages of a
telephone directory when the contract entered into by the parties
limits the company's liability for errors and omissions to an
amount equal to the cost of the advertisement. The trial court
granted summary judgment for the telephone company and the
advertiser has appealed.
The facts, as revealed by the pleadings and appellant's
deposition, are undisputed. Appellant Frank Wille operates a
heating and air conditioning sales and service business in
Wichita under the trade names, Frank Wille Company and Frank

Wille's Coleman Comfort Center, and for the thirteen years
prior to 1974 had purchased some form of yellow page listing
for his business in the telephone directory published by appellee
Southwestern Bell Telephone Company for the Wichita district.
In February, 1974, a sales representative for Bell contacted
appellant to discuss his yellow page listings in the directory to
be published in July, 1974. As a result appellant agreed to
purchase certain listings for both of his business trade names.
Appellant *756 received a copy of the written contract which
was executed. At this time appellant's business was located at
1633 East Second street and his business phone numbers were
265-2609 and 265-7231.
In April, 1974, appellant contacted Bell regarding changing his
telephone service to a new business location at 1909 East
Central street and expanding his service through additional
rotary or sequential telephone numbers. Appellant was advised
numbers were not available to him to expand his present
numbers sequentially. Hence he decided to subscribe to a new
number, 265-4685, in order to have additional telephone lines
available for his business in sequential numbers. As part of this
decision appellant cancelled the phone service to him under the
number, 265-7231. However, because his other telephone
number, 265-2609, was displayed on some equipment previously
sold, appellant decided to retain that service in the yellow pages
but not in the white.
In July, 1974, Bell distributed the new directory. Certain of
appellant's yellow page listings under various headings for the
business name Frank Wille's Coleman Comfort Center and
telephone number 265-2609 were omitted. The yellow page
advertising sold in February, 1974, applicable to the Frank
Wille Company, phone number 265-7231, appeared in the
directory. That advertising listed appellant's new address, 1909
East Central, and the new telephone number, 265-4685. Upon
learning of the omission appellant began advertising his
business on local television stations and in alternate forms of
advertising, with total expenditures being between four and five

thousand dollars.
Appellant was never billed nor has he paid for the omitted
listings. The written contract between the parties was subject to
thirteen terms and conditions which were set out on the back of
the contract. The fourth paragraph of those conditions provided:
"The applicant agrees that the Telephone Company shall not be
liable for errors in or omissions of the directory advertising
beyond the amount paid for the directory advertising omitted, or
in which errors occur, for the issue life of the directory
involved."
Appellant filed this action October 24, 1974, alleging breach of
contract and negligence by Bell in the omission. Damages were
sought in the amount of $9,990 for lost profits and expense for
alternative advertising.
The trial court entered summary judgment for Bell because of
the contractual limitation of liability for errors and omissions
and the matter is now here for review.
*757 Appellant contends the exculpatory clause upon which
appellee relies is contrary to public policy and should not be
enforced. He asserts unconscionability of contract in two
respects: The parties' unequal bargaining position and the form
of the contract and the circumstances of its execution.
American courts have traditionally taken the view that
competent adults may make contracts on their own terms,
provided they are neither illegal nor contrary to public policy,
and that in the absence of fraud, mistake or duress a party who
has fairly and voluntarily entered into such a contract is bound
thereby, notwithstanding it was unwise or disadvantageous to
him (Anno.: Sales "Unconscionability", 18 ALR 3d 1305, § 2, p.
1307). Gradually, however, this principle of freedom of contract
has been qualified by the courts as they were confronted by
contracts so one-sided that no fair minded person would view
them as just or tolerable. An early definition of
unconscionability was provided by Lord Chancellor Hardwicke,
in the case of Chesterfield (Earl of) v. Janssen, 2 Ves. Sen. 125,
28 Eng. Rep. 82 (1750):

"... [a contract] such as no man in his senses and not under
delusion would make on the one hand, and as no honest and fair
man would accept on the other; which are unequitable and
unconscientious bargains; and of such even the common law has
taken notice...." (p. 100.) (Discussed in Hume v. United
States, 132 U.S. 406, 411-413, 33 L. Ed. 393, 10 S. Ct. 134
[1889].)
The doctrine was first applied by early equity and some
common law courts in cases which approached clear fraud. (See
a discussion of these cases in the Anno.: 18 ALR 3d, § 3, p.
1309.)
The doctrine, however, received its greatest impetus when it
was enacted as a part of the Uniform Commercial Code. K.S.A.
84-2-302 provides in part that:
"(1) If the court as a matter of law finds the contract or any
clause of the contract to have been unconscionable at the time it
was made the court may refuse to enforce the contract, or it may
enforce the remainder of the contract without the
unconscionable clause, or it may so limit the application of any
unconscionable clause as to avoid any unconscionable result...."
(The doctrine of unconscionability in the area of private
contract has come into our Kansas law by three other recent
enactments: K.S.A. 16a-5-108, Uniform Consumer Credit Code;
K.S.A. 1975 Supp. 50-627, Consumer Protection Act; and
K.S.A. 1975 Supp. 58-2544, Residential Landlord and Tenant
Act.)
Although the UCC's application is primarily limited to contracts
for the present or future sale of goods (K.S.A. 84-2-102; 84-2-
105), *758 many courts have extended the statute by analogy
into other areas of the law or have used the doctrine as an
alternative basis for their holdings (Leff, "Unconscionability
and the Code The Emperor's New Clause", 115 U. Pa. L. Rev.
485). The UCC neither defines the concept of unconscionability
nor provides the elements or perimeters of the doctrine. Perhaps
this was the real intent of the drafters of the code. To define the
doctrine is to limit its application, and to limit its application is

to defeat its purpose. (Note, "The Doctrine of
Unconscionability", 19 Maine L. Rev. 81, 85.)
The comment to K.S.A. 84-2-302 sheds some light on the
drafters' intent. It provides in part:
"... The basic test is whether, in the light of the general
commercial background and the commercial needs of the
particular trade or case, the clauses involved are so one-sided as
to be unconscionable under the circumstances existing at the
time of the making of the contract.... The principle is one of the
prevention of oppression and unfair surprise . .. and not of
disturbance of allocation of risks because of superior bargaining
power...."
One commentator has elaborated on the two types of situations
which UCC is designed to deal with:
"... One type of situation is that involving unfair surprise: where
there has actually been no assent to the terms of the contract.
Contracts involving unfair surprise are similar to contracts of
adhesion. Most often these contracts involve a party whose
circumstances, perhaps his inexperience or ignorance, when
compared with the circumstances of the other party, make his
knowing assent to the fine print terms fictional. Courts have
often found in these circumstances an absence of a meaningful
bargain. [See Henningsen v. Bloomfield Motors, Inc., 32 N.J.
358, 161 A.2d 69 (1960).] "The other situation is that involving
oppression: where, although there has been actual assent, the
agreement, surrounding facts, and relative bargaining positions
of the parties indicate the possibility of gross over-reaching on
the part of either party. Oppression and economic duress in a
contract seem to be inseparably linked to an inequality of
bargaining power. The economic position of the parties is such
that one becomes vulnerable to a grossly unequal bargain." (19
Maine L. Rev., supra, pp. 82-83.)
(Accord: Spanogle, "Analyzing Unconscionability Problems",
117 U. Pa. L. Rev. 931.)
Although the doctrine of unconscionability is difficult to define
precisely courts have identified a number of factors or elements

as aids for determining its applicability to a given set of facts.
These factors include: (1) The use of printed form or boilerplate
contracts drawn skillfully by the party in the strongest economic
position, which establish industry wide standards offered on a
take it or *759 leave it basis to the party in a weaker economic
position (Henningsen v. Bloomfield Motors, Inc., supra;
Campbell Soup Co. v. Wentz, 172 F.2d 80); (2) a significant
cost-price disparity or excessive price; (3) a denial of basic
rights and remedies to a buyer of consumer goods (Williams v.
Walker-Thomas Furniture Company, 350 F.2d 445; 18 ALR 3d
1305); (4) the inclusion of penalty clauses; (5) the
circumstances surrounding the execution of the contract,
including its commercial setting, its purpose and actual effect
(In re Elkins-Dell Manufacturing Company, 253 F. Supp. 864,
[E.D. Pa.]); (6) the hiding of clauses which are disadvantageous
to one party in a mass of fine print trivia or in places which are
inconspicuous to the party signing the contract (Henningsen v.
Bloomfield Motors, Inc., supra); (7) phrasing clauses in
language that is incomprehensible to a layman or that divert his
attention from the problems raised by them or the rights given
up through them; (8) an overall imbalance in the obligations and
rights imposed by the bargain; (9) exploitation of the
underprivileged, unsophisticated, uneducated and the illiterate
(Williams v. Walker-Thomas Furniture Company, supra); and
(10) inequality of bargaining or economic power. (See also
Ellinghaus, "In Defense of Unconscionability", 78 Yale L.J.
757; 1 Anderson on the UCC, § 2-302, and cases cited therein.)
Important to this case is the concept of inequality of bargaining
power. The UCC does not require that there be complete
equality of bargaining power or that the agreement be equally
beneficial to both parties (1 Anderson, § 2-302:11, p. 401). As
has been pointed out:
"[The language of the comment to § 2-302 means] . .. that mere
disparity of bargaining strength, without more, is not enough to
make out a case of unconscionability. Just because the contract
I signed was proffered to me by Almighty Monopoly

Incorporated does not mean that I may subsequently argue
exemption from any or all obligation: at the very least, some
element of deception or substantive unfairness must presumably
be shown." (78 Yale L.J., supra, pp. 766-767.)
The cases seem to support the view that there must be additional
factors such as deceptive bargaining conduct as well as unequal
bargaining power to render the contract between the parties
unconscionable. In summary, the doctrine of unconscionability
is used by the courts to police the excesses of certain parties
who abuse their right to contract freely. It is directed against
one-sided, oppressive and unfairly surprising contracts, and not
against the consequences *760 per se of uneven bargaining
power or even a simple old-fashioned bad bargain (1 Anderson,
supra, § 2-302.11, p. 401).
The most recent application of the common law doctrine of
unconscionability in Kansas occurred in Steele v. J.I. Case Co.,
197 Kan. 554, 419 P.2d 902. There the plaintiff, a large scale
wheat and barley farmer, purchased from defendant three
combines which were delivered shortly before harvest. The
sales were evidenced by form contracts furnished by defendant.
According to the terms on the reverse side of the contract,
defendant warranted its equipment to be properly made and
capable of performing the work for which it was designed under
ordinary conditions. The contract further provided that should
defendant's product fail to operate as warranted, written notice
of the problem should be given to defendant's dealer. If the
dealer failed to correct the deficiencies, then defendant was to
be given a reasonable time to remedy the defect or advise its
local dealer of the appropriate remedy. In the event, however,
defendant was not able to remedy the defect, then, according to
the contract terms, defendant had the option either of replacing
the equipment or rescinding the sales contract by returning the
purchase price. The contract excluded all other express, implied
or statutory warranties, and limited defendant's liability for any
breach of the contract's express warranties to returning the
purchase price of its product.

Immediately after the combines were delivered to plaintiff, he
began having numerous difficulties. Complaints were made of
these deficiencies, and several attempts were undertaken by
defendant to correct them. After repeated attempts by defendant
to remedy the defects failed, plaintiff made several demands for
return of the purchase price. Each of plaintiff's demands was
refused. Thereafter, plaintiff agreed to trade in the defective
combines, and pay the difference for three new 1961 Case
combines, which were subsequently delivered to him.
Plaintiff brought suit to recover for damages to his crops caused
by the delay incident to defendant's numerous attempts to
correct the deficiencies in the combines initially purchased. The
matter was tried to a jury which returned a verdict in plaintiff's
favor. Judgment was entered on that verdict, and defendant
appealed.
The trial court instructed the jury to disregard the contractual
proviso limiting defendant's liability to any breach of its
warranty to the return of the purchase price. Defendant Case
maintained the broad accepted freedom of contract policy
should control. In *761 affirming the judgment we noted the
disparity of position in the contracting parties in that the
plaintiff had no part in the preparation of the printed form
contract, the plaintiff lacked knowledge of the exculpatory
clause and further that defendant knew of the special business
needs of plaintiff and their urgency and despite this knowledge
was dilatory in making amends either by timely repair of the
combines, their replacement or return of the purchase price.
Within this framework, we held the exculpatory clause in the
contract was void, saying:
"Liability for consequential or special damages may be limited
or excluded by the terms of a warranty unless, under all the
surrounding facts and circumstances, the limitation or exclusion
would prove to be inequitable." (Syl. para. 4.)
Clearly there were other factors present in Steele besides mere
disparity of bargaining power which resulted in the ruling. Also
to be noted is the fact the contract called for equipment to be

used for a specific purpose harvesting grain the breach of which
would cause the farmer to lose everything he had invested in
that grain crop. This latter factor presents a different situation
from that of the advertiser who is no worse off by reason of an
omission of his ad in the yellow pages than if he had made no
contract at all.
We have never dealt with contractual limitation of liability for
errors and omissions in the yellow pages directory but many
courts have. One case on the subject, relied upon heavily by
appellant, is Allen v. Mich. Bell Telephone Co., 18 Mich. App.
632, 171 N.W.2d 689. In a factual situation essentially identical
to that here the court declined to give effect to the limitation of
liability clause principally on the basis of unconscionability by
reason of the inequal positions of the parties in bargaining for
services for which no realistic alternative was available.
All other courts which have considered the matter, so far as we
can ascertain, have reached a contrary conclusion, that is, a
telephone company may by contract limit the amount of its
liability resulting from omissions and mistakes in the yellow
pages directory so long as it does not seek immunity from gross
negligence or wilful misconduct (see Gas House, Inc. v.
Southern Bell Tel. & Tel. Co., 289 N.C. 175, 221 S.E.2d 499,
and cases from fourteen other jurisdictions cited therein [221
S.E.2d 504]; also Anno.: Telephone Directory Mistake
Omission, 92 ALR 2d 919).
In Gas House, Inc. the North Carolina supreme court had this to
say on the subject:
*762 "The general principle governing the validity of contracts
against the charge that they are unreasonable is thus stated in 14
Williston on Contracts, 3d Ed., § 1632: "`People should be
entitled to contract on their own terms without the indulgence
of paternalism by courts in the alleviation of one side or another
from the effects of a bad bargain. Also, they should be
permitted to enter into contracts that actually may be
unreasonable or which may lead to hardship on one side. It is
only where it turns out that one side or the other is to be

penalized by the enforcement of the terms of a contract so
unconscionable that no decent, fairminded person would view
the ensuing result without being possessed of a profound sense
of injustice, that equity will deny the use of its good offices in
the enforcement of such unconscionability."' "The leading case
on the question of the validity of such a Limitation of Liability
Clause in a contract for telephone directory advertising is
McTighe v. New England Tel. & Tel. Co., supra where Circuit
Judge Medina, speaking for the Court of Appeals for the Second
Circuit, said: "`The publication of the classified directory [i.e.,
the `yellow pages'] * * * is wholly a matter of private contract
and contracts relating thereto are not required to be filed with
the Public Service Commission [of Vermont] which has no
jurisdiction except over matters relating to the public utility
services rendered by the company and the rates relative thereto.
..............
"`True it is that the courts will scrutinize with care clauses
exonerating public utility companies, such as railroads,
telegraph and telephone companies and others, from liability for
the consequences of their own negligence, with reference to the
public services rendered by them. The fact that the member of
the public patronizing such public utility companies must take
the contract proffered by the company or forego using the
service has enabled the courts to inquire into the reasonableness
of the type of clause now under discussion and by this test the
clause applicable to the alphabetical [i.e., white pages]
directory would as a matter of contract law be considered
unreasonable and unenforceable. But the principle which
enables courts to strike down and condemn clauses affecting the
performance by the company of its functions as a public utility
is limited to the area in which the public services are rendered
and has no application whatever to the domain in which the
public utility may freely contract in its private capacity. The
obtaining of the services of the public utility by way of
transportation or communications or providing gas or electricity
is quite apart from the leases, advertising contracts and a host

of other miscellaneous agreements commonly made by members
of the public with public utility companies. If there be some
disparity in the bargaining power of the contracting parties it is
no more than may be found generally to exist; and the courts
follow the general rule that the parties are free to contract
according to their own judgment and the reasonableness of their
engagements will not be entered into.' (Emphasis added.) "The
reason for the rule that a common carrier, or other public
utility, may not contract away its liability for negligence in the
performance of its public utility service and may not claim the
benefit of an unreasonable contract *763 limiting the amount of
its liability therefor, is that every member of the public is
entitled by law to demand such service with full liability as a
reasonable rate therefor. For the company to refuse to serve
unless the customer agrees to release it from liability for its
negligent performance of its obligation to serve would be a
denial of this legal right in the would-be customer. Thus, such a
contract limiting the liability of the carrier, or other public
utility, unless reasonable, is contrary to public policy and
invalid. This limitation upon the right of the common carrier, or
other public utility, to contract applies, however, only to its
undertakings to render services which fall within its public
service business. For example, a telephone company leasing
office space to a tenant, or an electric power company selling an
electric stove, is free to contract with reference to those matters
as is any other owner of a building or dealer in electric stoves.
The business of carrying advertisements in the yellow pages of
its directory is not part of a telephone company's public utility
business. "The inequality of bargaining power between the
telephone company and the businessman desiring to advertise in
the yellow pages of the directory is more apparent than real. It
is not different from that which exists in any other case in
which a potential seller is the only supplier of the particular
article or service desired. There are many other modes of
advertising to which the businessman may turn if the contract
offered him by the telephone company is not attractive. "We

find in this record no basis for a conclusion that the application
of the Limitation of Liability Clause could lead to a result so
unreasonable as to shock the conscience. In the absence of most
exceptional circumstances, which do not appear in this record,
the insertion of a `Yellow Page' advertisement under the wrong
classification heading will not produce a different result from
that which would follow a complete omission of the
advertisement from the directory. It would be virtually, if not
completely, impossible to determine what portion of the
business done by an advertiser is attributable to its use of
`Yellow Page' advertising. There are many factors which enter
into periodic fluctuations in the volume of business done by a
seller of goods. The purpose of the Limitation of Liability
Clause is to protect the telephone company from the danger of
verdicts primarily speculative in amount. This is not an
unreasonable objective. In this respect, the telephone company
is not in a different position from the local newspaper, radio or
television station, or other advertising media." (221 S.E.2d 504-
505.)
Appellant here attacks the limitation of liability clause in
several respects. He says it was buried in a number of other
terms and conditions of the same size print on the reverse side
of the contract from where the parties sign and that the
particular proviso was not effectively brought home to him at
the time he signed. He in effect asserts unfair surprise.
The front page of the contract provides space for setting out the
name or style of the business and other essential data in
connection with the listings covered. In two different places
attention is directed to the terms and conditions contained on
the reverse *764 side of the contract, one at the top of the form
and the other in block letters immediately above the signature
line for the purchaser. The latter states:
"THE APPLICANT HEREBY REQUESTS THE TELEPHONE
COMPANY TO INSERT THE ABOVE ITEMS OF
ADVERTISING IN THE ABOVE NAMED DIRECTORY
SUBJECT TO THE TERMS AND CONDITIONS ON THE

REVERSE SIDE HEREOF."
The terms and conditions on the reverse side are set out in
clearly legible type in thirteen numbered paragraphs, and are
written in common words. It cannot be said they are one-sided.
Some are for the protection of and inure to the benefit of the
advertiser. The language of the challenged paragraph 4 is not
couched in confusing terms designed to capitalize on
carelessness but is clear and concise. Appellant did testify he
had not attempted to read the various terms and conditions
listed on the reverse side of the contract. He was an experienced
businessman and for at least thirteen years had used the yellow
pages. In his business it is reasonable to assume he as seller and
serviceman had become familiar with printed form contracts
that are frequently used in connection with the sale and
servicing of heating and air conditioning equipment and their
attendant warranties and limitations of liability. And, as pointed
out in Gas House, Inc. v. Southern Bell Tel. & Tel. Co., supra,
and in several other cases cited therein, yellow pages are not a
unique or monopolistic form of advertising. Numerous
alternative forms exist.
There is no indication here either of gross negligence or wilful
or wanton conduct in the omission of appellant's listing and he
asserts nothing beyond simple neglect. It appears the omissions
arose from clerical error in the handling of appellant's request
for changes after the original contract.
In Steele v. J.I. Case Co., supra, we recognized that liability for
consequential damages may be limited or excluded contractually
unless under all the surrounding facts and circumstances, the
limitation or exclusion would be inequitable (Syl. para. 4). Each
case of this type must necessarily rest upon its own facts but
after examining the terms of the contract, the manner of its
execution and the knowledge and experience of appellant we
think the contract was neither inequitable nor unconscionable so
as to deny its enforcement.
Our conclusion that the trial court ruled correctly is not affected
by anything said in Milling Co. v. Postal Telegraph Co., 101

Kan. *765 307, 166 Pac. 493. There this court held that a
telegraph company could not by contract limit its liability for
negligence in transmitting telegraphic messages. The contract
limitation was sought to be applied to the public duty of the
company the transmission of messages and not to a matter of
private contract in an area of private service as here. The court
did recognize that not all contracts against liability are void.
The judgment is affirmed.
APPROVED BY THE COURT.

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