Procedural Unconscionability Reviewed By Manifest Weight; Substantive Unconscionability Reviewed De Novo

Ozma Tabassum sued Javed Younis were married in Canada and had one child, Azra. They moved to Illinois, where their relationship took a turn for the worse. Ozma took Azra back to her family in Canada. While in Canada, Ozma and Javed negotiated a postmarital agreement. Ozma agreed not to file for divorce. In return, Javed agreed to end his extra-marital affair. Javed also agreed that if Ozma did file for divorce — which would happen if Javed did not uphold his part of the agreement — then Ozma would get the house, and it would be considered nonmarital property.

Ozma sued for divorce in Illinois. But the trial court ruled that the postmarital agreement was invalid and that the house was marital property. In reversing these rulings, the Second District Illinois Court of Appeals considered the questions of procedural and substantive unconscionability of a postmarital contract, and the proper standards of review in the appellate court.

The appellate court first considered procedural unconscionability. “A contract is procedurally unconscionable if an impropriety in the process of forming the contract deprived a party of a meaningful choice … The trial court found that the postmarital agreement was procedurally unconscionable largely on the basis that petitioner was in Canada with Azra while the parties were negotiating the terms of the postmarital agreement, ‘the implicit threat being that unless agreement was reached she and Azra would remain in Canada, reducing if not eliminating [respondent’s] ability to meaningfully parent.’ This statement equates to a finding that respondent was under duress during the negotiation of the agreement. Duress may make an agreement between spouses unconscionable.”

Footnoting the standard of review, the appellate court ruled, “Where procedural unconscionability is based on contract terms and the disparity of bargaining power between the contract’s drafter and the party claiming unconscionability, the issue is reviewed de novo … However, because the procedural unconscionability in this case rests on the issue of duress, we use the manifest weight standard.

The appellate court also ruled that the agreement was not substantively unconscionable. “Substantive unconscionability is based on the fairness and obligations of the contract’s terms, and it can be shown by “‘contract terms so one-sided as to oppress or unfairly surprise an innocent party, an overall imbalance in the obligations and rights imposed by the bargain, and significant cost-price disparity.'” … We review this issue de novo. … However, to the extent that we consider factual findings in our analysis, we will use a manifest weight of the evidence standard.”

Read the whole opinion, which includes a good discussion of the nature of contractual unconscionability, IRMO Tabassum, No. 2-06-0843 (12/7/08), by clicking here.