§ 171.022.Unconscionable Agreements Unenforceable

One sentence, and it is the most-cited defense to a motion to compel in Texas.

A court may not enforce an agreement to arbitrate it finds was unconscionable. The prohibition is addressed to the court and phrased as a bar.

The time of the making is what is measured. The question is whether the agreement was unconscionable at the time the agreement was made, not whether it turned out badly.

That timing rule cuts both ways. A clause that looks harsh in hindsight is judged as of signing; a clause unfair when signed is not saved by a party’s later willingness to live with it.

The finding belongs to the court. Unconscionability of the arbitration agreement is decided by the judge deciding whether to compel.

The section does not define the term, leaving it to the general contract law the state already had.

It is the counterweight to Section 171.021. That section makes the order mandatory on a showing of agreement and refusal; this one supplies the ground on which the agreement itself fails.

Its reach extends past this chapter. Section 172.001(d) provides that the international chapter does not supersede this section, so it applies to international commercial arbitration as well.

That carve-out is telling. The legislature was prepared to let the international chapter displace most of Chapter 171, and kept this protection in place across both.