Woollums v. Horsley
Court of Appeals of Kentucky, 1892.
Woollums, a 60-year-old uneducated man with little business experience, agreed to sell the mineral rights to his land to W.J. Horsley, a businessman, for 40 cents per acre. The deed was never transferred, so Horsley sued for specific performance.
The lower court granted the specific performance.
Was the agreement unconscionable?
Yes. Case reversed.
An equity court won’t grant an order of specific performance unless the contract is just and fair.
- Here, the land actually had a value of $15/acre, and Horsley was trying to enforce a contract that required him to pay only 40 cents/acre for.
- Equity should not help out such a harsh bargain.
Q. Why not mistake/misrepresentation doctrine?
- A court would probably find that he bore the risk, since it was his land after all.
Need both procedural unconscionability (negotiation/leading up to the agreement) and substantive unconscionability (the actual terms of the agreement) in order to use the unconscionability doctrine.
- Prof: it’s a sliding scale as to how much of either is required.
- Form contracts and adhesion contracts (take it or leave it) are a good place to start when arguing procedural, but do NOT, by themselves, render a K unconscionable.
- If unconscionable, courts have the power to either strike a portion of the K, or strike the entire K.