April 20, 2011
Charlie Sheen Claims that Arbitration Provision is Unconscionable.
Just when I thought that the Charlie Sheen saga was over (at least from a Contract Law blogging perspective), this comes along. Charlie Sheen--entangled in a contractual dispute with his employer, Warner Brothers--first claimed that his contract had no morals clause (which turned out to be false) and later claimed (and said) all sorts of much crazier things. Now, Sheen and his lawyers are arguing that the provision in his contract requiring any dispute to be resolved via arbitration is unconscionable. Yes, you read that correctly. Charlie Sheen--whom many have described as having no conscience--is claiming unconscionability.
When I teach the concept of unconscionability, I emphasize that a provision is unconscionable only if there is both procedural unconscionability (one party has substantially more bargaining power than the other, among other factors) and substantive unconscionability (the term itself unreasonably favors one party). I also state that there is a sliding scale--the more procedural unconscionability you can show, the less substantive unconscionability you need to show, and vice versa. Admittedly, these are generalizations, but they're the kind of generalizations that tend to work well for first-year Contracts students.
I doubt Charlie Sheen could show either procedural or substantive unconscionability here. As Warner Brothers' lawyers note, the procedural element likely is lacking when the party claiming that he had little bargaining power was able to bargain for "$2 million dollars for [every] 22 minute[s] of television." To counter that point, Sheen's lawyers understandably emphasize that Sheen's contract was "non-negotiable" and, on the substantive side, was quite "onerous." I am not familiar with the nuances of California law on this subject so it will be interesting to see how this particular case is decided.
It's not unheard of for courts to rule that arbitration provisions are unconscionable (see our earlier post regarding the AT&T case recently heard by the Supreme Court). However, if you are tired of hearing about Mr. Sheen, you should hope that the court finds that the arbitration term was valid. That's because...if it is unconscionable, the case most likely will be heard in a California court, where the whole thing will be filmed and potentially broadcast to us all. Yikes.
For previous ContractsProf Blog posts about other Sheen-focused Contract Law topics, see here (Warner Brothers' termination notice), here (Warner Brothers' complaint), here (Sheen's countersuit alleging interfence with contractual relations), here (Sheen's bargaining power--perhaps relevant to his unconscionability claim), and here. At this point, I'm wondering if I could teach every Contract Law topic via Charlie Sheen. The textbook, entitled, "Winning at Contract Law!" sure would be fun to write.
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Why do you think Charlie is flashing in "loser" sign? Is he saying "I am a loser" or is he telling the paparazzi that he thinks they are losers?
Posted by: Jeremy Telman | Apr 20, 2011 1:16:50 PM