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Vicksburg Partners9/22/2005
case today, the limitation of liability clause contained in section E.7 places a unilateral ceiling on Vicksburg Partners' potential liability. To this end, they have issued a contract of adhesion containing a contractual provision which is one-sided on its face and unilaterally oppressive in its effect. Moreover, in applying a substantive review to this provision, we can not help but take notice of the fact that Stephens's ability to fairly adjudicate her claim has been severely hamstrung and limited to a maximum recovery of $50,000, or less, while Vicksburg Partners has access to an unlimited damage award. Clearly, this provision by its very nature evidences garden variety substantive unconscionability inasmuch as it is encapsulated in a contract of adhesion. Accordingly, the limitation on liability clause is unenforceable and is stricken from the parties' contractual agreement.
. Additionally, while the waiver of punitive damages in paragraph E.8 applies to all parties to the contract, we find that based on the facts and circumstances of today's case, the practical effect of paragraph E.8 likewise causes it to be substantively unconscionable. While we can think of numerous factual scenarios which would justify Stephens seeking punitive damages against Vicksburg Partners, we are conversely for the most part unable to develop factual scenarios which would justify Vicksburg Partners seeking punitive damages against Stephens. In other words, Vicksburg Partners suffers little, if any, but gains a lot by waiving its rights to recover punitive damages, while the same is not true for Stephens. In consideration of the effect of the clause itself and the initial determination that today's contract is one of adhesion, we find that this waiver of punitive damages clause is also unenforceable.
. In analyzing the effect of substantive oppression one treatise recognized that courts have the broad authority to discover substantive abuse in the form of harshness in a specific unreasonable provision which was included in an agreement without the employment of any procedural abuse in its formation. 8 Richard A. Lord, Williston on Contracts § 18:14, at 89 (4th ed. 1998). It likewise notes that " uch a contractual provision may be invalidated on unconscionability grounds as a form of oppression reached under the Code's "principle...of the prevention of oppression." Id.
. This Court has readily recognized this remedial power of courts and has recognized a court's ability to invalidate provisions which are unconscionable and oppressive. In Norwest Financial Mississippi, Inc. v. McDonald, 905 So.2d 1187, 1194 (Miss. 2005) we held that, "courts have the ability to restrict enforcement of specific terms of a contract that are viewed as unconscionable." To this end, courts have the ability to strike terms which render an otherwise valid contractual arrangement unconscionable. In Russell v. Performance Toyota, Inc., 826 So.2d 719, 724-25 (Miss. 2002), we noted this remedial authority provided to the courts of our state:
Russell contends that the following two sentences within the arbitration agreement violate Miss.Code Ann. § 15-1-5 (1995): "[Arbitration] must be initiated within 180 days after the claim or controversy first arises. Failure to timely initiate arbitration shall constitute a waiver of the claim or controversy." Russell states that the sentences attempt to shorten the statute of limitations designated in § 15-1-5, and therefore the arbitration agreement is void. Mississippi case law, however, holds that if a court strikes a portion of an agreement as being void, the remainder of the contract is binding. See, e.g., Lawler v. Government Employees Ins. Co., 569 So.2d 1151, 1153 (Mi
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