Printable Format84-2a-108. Unconscionability. (1) If the court as a matter of law finds a lease contract or any clause of a lease contract to have been unconscionable at the time it was made, the court may refuse to enforce the lease contract, or it may enforce the remainder of the lease contract without the unconscionable clause, or it may so limit the application of any unconscionable clause as to avoid any unconscionable result.
(2) With respect to a consumer lease, if the court as a matter of law finds that a lease contract or any clause of a lease contract has been induced by unconscionable conduct or that unconscionable conduct has occurred in the collection of a claim arising from a lease contract, the court may grant appropriate relief.
(3) Before making a finding of unconscionability under subsection (1) or (2), the court, on its own motion or that of a party, shall afford the parties a reasonable opportunity to present evidence as to the setting, purpose and effect of the lease contract or clause thereof, or of the conduct.
(4) In an action in which the lessee claims unconscionability with respect to a consumer lease:
(a) If the court finds unconscionability under subsection (1) or (2), the court shall award reasonable attorney fees to the lessee.
(b) If the court does not find unconscionability and the lessee claiming unconscionability has brought or maintained an action such lessee knew to be groundless, the court shall award reasonable attorney fees to the party against whom the claim is made.
(c) In determining attorney fees, the amount of the recovery on behalf of the claimant under subsections (1) and (2) is not controlling.
History: L. 1991, ch. 295, ยง 8; February 1, 1992.
KANSAS COMMENT, 1996
1. This section authorizes courts to police lease contracts for unconscionability. Even prior to the enactment of Article 2A, courts had extended the doctrine of unconscionability to leases by analogy to Article 2. See, e.g., John Deere Leasing Co. v. Blubaugh, 636 F. Supp. 1569 (D. Kan. 1986).
2. Subsection (1) is virtually identical to section 84-2-302(1). The section does not define unconscionability, but the Kansas Supreme Court in Wille v. Southwestern Bell Tel. Co, 219 K. 755, 549 P.2d 903 (1976), identified a list of ten factors as aids for determining whether a contract clause is unconscionable. See the discussion in 1996 Kansas Comment 2 to 84-2-302. Subsection (3) differs from section 84-2-302(2) in that it permits parties to introduce evidence concerning the "setting" of the contract or clause rather than its "commercial setting." See K.S.A. 16a-5-108(2).
3. Other subsections draw from the Uniform Consumer Credit Code, K.S.A. 16a-1-101 et seq., which would apply in any event in Kansas, in adopting special rules for unconscionability in consumer leases, see K.S.A. 16a-5-108. Under subsection (2), even if a clause or the contract as a whole is not unconscionable, if the clause or contract was "induced by unconscionable conduct" the court may grant appropriate relief. In other words, procedural unconscionability, even in the absence of substantive unconscionability, is enough. Compare 1996 Kansas Comment 2 to 84-2-302. The court also may grant relief from unconscionable conduct in the collection of a claim based on a lease contract. The Official Comments to this section give examples of the types of conduct that might qualify. Subsection (4) provides for the recovery of attorney's fees in actions in which a lessee asserts that a consumer lease or any clause of the lease is unconscionable. If the lessee prevails, the lessee may recover its fees; but if the lessee brings a claim that it knew to be groundless, it is liable for the lessor's fees.