Predictive Office Memo 2

TO:
FROM: Anna Brown

RE: Unconscionability Law in Virginia
QUESTION PRESENTED:
What determines whether an agreement or contract between two individuals is

unconscionable in Virginia?
BRIEF ANSWER:
Virginia law uses a two-prong test that determines whether or not an agreement/contract
is unconscionable:
A) Gross disparity; defined as a contract or agreement that gives one party an
excessive advantage or unconscionable advantage over the other party in terms of
the agreement.
B) Overreaching or Oppressive influences; defined as an act or acts that are
persuading against a another party who may have a physical or mental disability,
ignorance of, or lack the ability to understand the language of agreement , the
gaining of an unconscionable advantage over another by unfair or deceptive
means.
DISCUSSION:
Virginia utilizes the two-prong test to determine the validity of an agreement/contract. If
the contract proves to show an unfair and excessive advantage of one party over another and
displays an act or acts that persuade another party through deception, the contract or agreement
will be considered invalid or unconscionable in the court of law. An example of The two prong
test is given below.
1. Gross Disparity
In the event of Gross disparity, one makes the accusation and must prove that
there’s an extreme inequality in the division of assets by means of misleading or hidden
information in regards to the value of the assets between the parties involved in the contract or
agreement.
A) In the case of Galloway v. Galloway, 622 S.E.2d 267 (Va. Ct. App. 2005), the
husband and wife entered into a property agreement. The wife filed motion stating
the contract was unconscionable. The court examined the “adequacy of price” or
“quality of value to determine whether or not gross disparity was present. In this
particular case, gross disparity was proven to exist in the value of the property
each party received. As the results of an agreement, the wife received a pickup
truck valued at 11, 000 and the husband received the marital home and the
business acquired during the marriage. The value of the marital home and
business together was 200,000. The court upheld that gross disparity did exist.
1
B) I n the case of Chaplain v. Chaplain, 54 Va. App. 762, 682 S.E.2d 108, 2009 Va.
App. (2009), the husband and wife entered into a premarital agreement which
stated that in the event of a divorce, each party waives any rights to property,
inheritance, equitable distribution, spousal support, retirement and insurance
benefits. The wife was entitled to 100,000 in the event of the husband’s death, if
they were still married and living together. The husband did not disclose his
networth to the wife before signing the agreement. Gross disparity in assets was
not proven in that the parties were not yet married at the time of the agreement, no
marital property existed, and both parties agreed to maintain their separate assets
although net worth was not disclosed.
2. Overreaching or Oppressive Influences

In the event of overreaching or oppressive influences, one makes the accusation
and must prove that overreaching or oppressive influences existed during the time of the
agreement or contract between the parties. An agreement was made as a result of a mental or
physical inability to understand the agreement, misleading information was provided, deception
and persuasion was used to validate the agreement.
A) In the case of Sims v. Sims, 55 Va. App. 340 (2009), the wife entered into a
property settlement agreement in which the husband received the marital home
and all debt, both parties received the vehicle they had in their possession. The
wife had health issues and was left without medications as she’d been on the
husband’s insurance, was boring money and could not receive medicaid or food
stamps as a result of the vehicle’s title being in her name. The wife denied reading
the agreement, stating she had a 3rd grade education level, did not understand the
legality of the agreement, and that being on several medications that prevented
her from making a sound judgement. Part (B) of overreaching and oppressive
influences states, ignorance, weakness of mind, sickness, old age, incapacity,
pecuniary necessities, and the like, on the part of the other, these circumstances,
combined with evidence of the first prong, inadequacy of price, may easily induce
a court to grant relief, defensive or affirmative. In Sims v. Sims, overreaching or
oppressive influences was proven in that the wife was not able to make sound
judgement based upon mental abilities.
B) In the case of Derby v. Derby, 378 S.E.2d 74 (Va. Ct. App. 1989), the wife filed
for divorce alleging cruelty and the husband filed alleging adultery. The wife
persuaded the husband to sign a property agreement giving her full ownership of
the home they shared. The husband later stated he only agreed to signing the
agreement because he thought the wife would in return come back to the home
they shared. There was evidence of concealment, misrepresentation, and undue
advantage on the part of the wife as well as emotional weakness on the part of the
husband. The wife concealed her extramarital relationship and assured her
husband that there had been no infidelity. Misrepresenting the situation under
circumstances that tend to encourage the other spouse to anticipate a
reconciliation are important in considering whether there has been oppressive
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conduct to achieve an unfair agreement. In Derby v. Derby, overreaching and
oppressive influences were proven in that the wife preyed on the husband’s
emotional state of mind in order for him to sign the agreement.
CONCLUSION
In conclusion, Virginia’s court uses the two-prong test to establish whether or not
an agreement or contract is unconscionable. In order for unconscionability to exist, both
instances need to be proven. Those instances are that a gross disparity exists, in which there is an
unequal and extreme division in the value of assets and that overreaching and oppressive
influences were present, in which one party used the weakness of the other party to their
advantage to gain in the agreement.

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TO:

FROM: Anna Brown

What determines whether an agreement or contract between two individuals is

2. Overreaching or Oppressive Influences

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