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Legal Memorandum: Obtaining Reconsideration of an Order

Issue: What burden must a party sustain in order to obtain reconsideration of an earlier ruling on unconscionability of a contract?

Area of Law: Business Organizations & Contracts, Litigation & Procedure
Keywords: Reconsideration of an order or decision; Unconscionable contract; Procedural and substantive unconscionability
Jurisdiction: Virgin Islands
Cited Cases: 341 F.3d 256; 531 U.S. 79; 283 F.3d 595
Cited Statutes: Local Rule 7.4
Date: 08/01/2006

Local Rule 7.4 provides that a party may seek reconsideration of an order or decision made by a judge or magistrate if there is (1) an intervening change in controlling law; (2) availability of new evidence; or (3) the need to correct clear error or prevent manifest injustice.  See Local Rule 7.4. 

Under Virgin Islands law, a court is to provide relief from an unconscionable contract or unconscionable terms thereof if the contract is procedurally and substantively unconscionable:

Courts have generally recognized that the doctrine of unconscionability involves both “procedural” and “substantive” elements.  “Procedural unconscionability pertains to the process by which an agreement is reached and the form of an agreement, including the use therein of fine print and convoluted or unclear language.”  This element is generally satisfied if the agreement constitutes a contract of adhesion.  A contract of adhesion “‘is one which is prepared by the party with excessive bargaining power who presents it to the other party for signature on a take-it-or-leave-it basis.'”

Alexander v. Anthony Int’l, L.P., 341 F.3d 256, 265 (3d Cir. 2003) (citations omitted).  Cf.  Tarulli v. Circuit City Stores, Inc., 333 F. Supp. 2d 151, 158 (S.D.N.Y. 2004). 

The second issue to be addressed in determining unconscionability is substantive unconscionability:

The party challenging the contract therefore must also establish “substantive unconscionability.”  This element refers to terms that unreasonably favor one party to which the disfavored party does not truly assent.  According […]

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