Civil Code § 1670.5
Unconscionable contracts and clauses
A court may refuse to enforce a contract — or any clause — it finds was unconscionable when made; this is the main ground for revoking an employment arbitration agreement.
Read the official text at California Legislative Information →
Overview
Civil Code section 1670.5 codifies the unconscionability doctrine: a court may refuse to enforce a contract, or any clause, that it finds was unconscionable at the time it was made. In employment law its most important role is as the principal state-law ground for revoking a mandatory arbitration agreement under Code of Civil Procedure section 1281.2.
Unconscionability is a generally applicable contract defense, which is significant under the Federal Arbitration Act: because it applies to all contracts and does not single out arbitration, it generally survives FAA preemption.
The two-pronged analysis
Concerns oppression or surprise arising from unequal bargaining power — typically an adhesive, take-it-or-leave-it agreement imposed as a condition of employment, or terms hidden in fine print.
Concerns overly harsh, one-sided, or unfairly one-directional terms. Examples in arbitration agreements include lack of mutuality, curtailed discovery, or fee-shifting that deters claims.
Both prongs must be present, but they are evaluated on a sliding scale: the more substantively oppressive the terms, the less procedural unconscionability is required to render the agreement unenforceable, and vice versa.
Judicial construction
The California Supreme Court applied the doctrine to a one-sided employment arbitration agreement in OTO, L.L.C. v. Kho, illustrating how procedural oppression combined with harsh terms can defeat enforcement. Because unconscionability is generally applicable, it remains available even where the FAA governs the agreement. (See OTO, L.L.C. v. Kho; Code Civ. Proc. § 1281.2.)
Practice notes
In opposing a motion to compel arbitration, build both prongs — procedural (adhesion, surprise) and substantive (one-sided terms) — and emphasize that unconscionability is a generally applicable defense not preempted by the FAA. Identify the specific oppressive terms and how they tilt the proceeding against the employee.
Related on this site
Practitioner analysis, current as of June 2026 — not the statute itself. Statutes are amended and decisional law evolves; confirm the operative language and current authority at the official source before relying.
See also: Ramirez v. Charter Communications