Final answer:
The unconscionability of an agreement is evaluated at the time of contract formation, focusing on both the procedural circumstances and substantive terms of the contract to determine fairness.
Step-by-step explanation:
The unconscionability of an agreement is evaluated at the time the contract is formed. This legal concept refers to whether or not the terms of the agreement are so unfair to one party that they are oppressive or shock the conscience. Courts typically consider both procedural and substantive unconscionability. Procedural unconscionability examines the circumstances of how the contract was made, which includes assessing the bargaining power of each party and whether terms were hidden in fine print or presented in an overly complex manner. Substantive unconscionability focuses on the contract terms themselves and whether they are unjustly one-sided.
An agreement might be deemed unconscionable if one party, due to unequal bargaining power, was pressured into accepting terms that a reasonable person would find unfair under the circumstances. This evaluation is based on the conditions existing at the contract's inception, not on facts that emerge after the agreement is made.