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CBA Responds to Supreme Court Request for Clarification on “Unconscionability”

The doctrine of unconscionability allows a contract to be nullified. Therefore, how courts apply this doctrine is of great significance, particularly to entities like banks that use contracts with large numbers of consumers. The California Supreme Court is deciding a case, Sanchez v. Valencia Holding Company LLC, that will apply the doctrine to an arbitration agreement in an automobile contract. The court has requested briefing from interested parties to address which of the many standards of unconscionability that California courts have applied in the past should be the prevailing standard. Jan Chilton, partner with the law firm of Severson & Werson, has prepared on CBA and other associations’ behalf an excellent letter to help guide the court. If you have any questions, contact Leland Chan at lchan@calbankers.com.

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