Fuentes v. Empire Nissan (SC S280256 2/2/26) Difficult-to-Read Employment Arbitration Agreement | Substantive and Procedural Unconscionability – Employment Law Weekly

Fuentes v. Empire Nissan (SC S280256 2/2/26) Difficult-to-Read Employment Arbitration Agreement | Substantive and Procedural Unconscionability

To establish that a contract is unenforceable because it is unconscionable, the party opposing enforcement must show unfairness both in the procedure by which the contract was formed and the substance of its terms.  Here, we consider how to account for illegibility in this analysis.  The trial court relied on Davis v. TWC Dealer Group, Inc. (2019) 41 Cal.App.5th 662, 674 (Davis) to conclude that small, difficult-to-read print supports a finding of substantive unconscionability as well as procedural unconscionability.  Disagreeing with Davis, the Court of Appeal held that “tiny and unreadable print” is a problem of procedural unconscionability only and should not be double counted as a problem of substantive unconscionability. (Fuentes v. Empire Nissan, Inc. (2023) 90 Cal.App.5th 919, 930 (Fuentes).)  We granted review to resolve this conflict.  We hold that a contract’s format generally is irrelevant to the substantive unconscionability analysis, which focuses on the fairness of the contract’s terms, but that courts must closely scrutinize the terms of difficult-to-read contracts for unfairness or one-sidedness.  We remand for further consideration in light of our clarification of the law.

https://www4.courts.ca.gov/opinions/documents/S280256.PDF

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