Can I get Out of a One-Sided Contract? Adhesion Contracts and Unconscionability in South Carolina

Unless you live off the grid, you have almost certainly signed a very long contract full of dense legalese. You probably didn’t even read it. You certainly didn’t attempt to negotiate better terms for yourself. You just signed your name and hoped for the best.

These types of one-sided, boilerplate contracts are known as adhesion contracts, and they’re very common. If you want to lease a car, buy a new build home, enjoy streaming content, or enjoy any other number of products or services, you’ll encounter one. It’s a take-it-or-leave-it situation: accept the contract as is or simply don’t enjoy the product or service.

But what if you discover after signing that you’ve made a big mistake and want out? Can you get out of a one-sided adhesion contract?

Maybe. One way to get out of such a contract is for a court to find the contract terms so one-sided and oppressive they’re considered unconscionable. Today we’ll look at where South Carolina courts draw the line between enforceable and unenforceable with respect to adhesion contracts, and see what the South Carolina Court of Appeals said on the topic in Mart vs. Great Southern Homes, Inc. (2023).

Elements of Unconscionability in South Carolina

A court can find a contract, a clause, or behavior “unconscionable” when it’s so egregious that it shocks the conscience of the court. We’ve covered unconscionability in depth on this blog before when looking at Huskins v Mungo Homes, LLC (2022); read that blog here.

In South Carolina, two elements are required for unconscionability with respect to contract law:

1. Absence of meaningful choice
2. Oppressive and one-sided terms

Both elements need to be present for a court to find a contract or its terms unconscionable.

When a clause is found to be unconscionable, the court has the discretion to sever that clause and enforce the rest of the contract as is; render the entire contract unenforceable; or limit the application of the unconscionable clause. (See South Carolina code Section 36-2-302).

Adhesion Contracts in South Carolina and Unconscionability

The question is whether adhesion contracts contain:

1. Absence of meaningful choice AND
2. Oppressive and one-sided terms

By their nature, adhesion contracts entail an absence of meaningful choice. The party signing the contract (typically an individual consumer) does not have the opportunity to negotiate terms with the party writing and presenting the contract (typically a large company).

Adhesion contracts are also one-sided by nature. Terms favor the party providing the contract and disfavor the signing party.

The final element to satisfy for unconscionability is “oppressive.”

What’s Considered “Oppressive”?

The 2023 South Carolina Court of Appeals case Mart v. Great Southern Homes, Inc. (find it here) mainly focuses on whether arbitration can be compelled when a single contract contains conflicting arbitration clauses. (The court says yes.) At the end of its decision, the court also briefly addressed the issue of adhesion contracts and unconscionability.

Quoting the South Carolina Supreme Court case Damico v. Lennar Carolinas, LLC (2022), it wrote “a take-it-or-leave it contract of adhesion is not necessarily unconscionable, even though it may indicate one party lacked a meaningful choice. […] Rather, to constitute unconscionability, the contract terms must be so oppressive that no reasonable person would make them and no fair and honest person would accept them.” (emphasis added)

And: “The distinction between a contract of adhesion and unconscionability is worth emphasizing: adhesive contracts are not unconscionable in and of themselves so long as the terms are even-handed.” (emphasis in the original)

In the Mart opinion, the court provides some examples of unconscionable and therefore unenforceable terms from other cases involving home builders:

• Smith v. D.R. Horton, Inc. (SC Supreme Court, 2016, here): D.R. Horton’s attempts to disclaim implied warranty claims and prohibit monetary damages of any kind; contract terms left relief “to the whim” of D.H. Horton
• Damico (SC Supreme Court, 2022, here): Lennar’s contract gave Lennar “sole election” to choose the parties for arbitration, potentially forcing purchasers to separately litigate against subcontractors in circuit court
• Huskins (SC Court of Appeals, 2022, here): The Mungo Homes contract shortened the statutory limitation period to bring a claim from three years (as provided for in state law) to a maximum of ninety days

These terms go beyond normal contract terms in favoring the contract-writing party such that the courts ultimately found them “oppressive.”

Be Careful What You Sign

So, can you get out of an adhesion contract? Maybe – but probably not. Even if you’re successful in proving in court that certain contract terms are unconscionable, the court may simply sever those terms and allow the rest of the contract to stand.

The bottom line: If you don’t want to be held to the terms of the contract, simply don’t sign it in the first place. You can’t count on getting out of a contract after the fact.

(And don’t forget that many contracts, including many EUAs and contracts you agree to digitally, give you the opportunity to opt out of arbitration in writing within 30 days, as we previously covered in this blog on arbitration.)

For help with contracts, business law, estate planning, and probate, contact Gem McDowell at the Gem McDowell Law Group. Gem and his team help individuals, families, and businesses in South Carolina from offices in Myrtle Beach and Mount Pleasant. Gem has over thirty years of experience and can help you and your family or your business protect your interests, avoid mistakes, and achieve peace of mind. Call today to schedule your initial consultation at 843-284-1021.