Which characteristic defines an unconscionable contract?

An unconscionable contract is primarily characterized by its exploitation of the weaker party's bargaining position. This refers to situations where one party has significantly more power, knowledge, or resources than the other, leading to a grossly unfair agreement. The unequal bargaining power can result in terms that are oppressively advantageous to the stronger party, effectively taking advantage of the vulnerability or lack of options faced by the weaker party.

In legal terms, unconscionability can be established if the contract's terms are excessively one-sided and if there is a lack of meaningful choice for the party that is being exploited. Courts often look at two main elements: procedural unconscionability, which examines how the contract was formed and the context surrounding it, and substantive unconscionability, which focuses on the actual terms of the contract.

The other options do not accurately reflect the nature of an unconscionable contract; it is not always legally binding in all situations, may not benefit both parties equally, and does not require a written form to be enforceable, as some verbal agreements can also be deemed unconscionable based on their content and context.