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Seabrook v. Commuter Hous. Co. - 72 Misc. 2d 6, 338 N.Y.S.2d 67 (Civ. Ct. 1972)

Rule:

Unequal bargaining powers and the absence of a meaningful choice on the part of one of the parties, together with contract terms which unreasonably favor the other party, may spell out unconscionability.

Facts:

According to the terms of the parties' lease, the tenancy was to commence upon a certain date, unless the building, which was under construction, was not completed. It was not finished until four months after the stated date. The tenant informed the landlord that she had been forced to obtain other shelter due to the delay, and she requested the cancellation of the lease, the return of her deposit and her first month's rent. The landlord refused. Thereafter, plaintiff tenant filed an action against the defendant landlord for the return of the security deposit and one month’s rent. At the trial, plaintiff testified that neither the landlord nor his renting agent explained the construction clause to her before she executed the lease. She also testified that she was not represented by an attorney.

Issue:

Was a prospective tenant entitled to have the lease between her and defendant landlord cancelled?

Answer:

Yes.

Conclusion:

The court rendered judgment in favor of the plaintiff tenant. In finding that the clauses were unconscionable, the court analogized the case to those governed by U.C.C. § 2-302, which provided that if the court found that a contract clause was unconscionable at the time in was made, the court could refuse to enforce any part, or all, of the contract. According to the court, the lease unfairly required the tenant to commence her tenancy whenever the building was ready, without any limitation on time. The landlord, who was knowledgeable in residential leases was aware of the terms, which were buried in a series of complex clauses, had an unfair advantage over the tenant. Thus, the court found the clauses to be unconscionable.

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