## Facts

- An 81-year-old widow owned a waterfront residence in Brielle, New Jersey; her husband died suddenly on January 3, 2000.
- Within weeks, she executed multiple powers of attorney concerning the property, including one later prepared by Sitogum in favor of Marlene Van Noord.
- Acting under that Sitogum-prepared power of attorney, Van Noord executed an option on January 27, 2000 giving Sitogum the right to buy the property within eight months for $800,000, with option payments of $1,000 per month.
- Sitogum was not yet incorporated at the time the option was executed (it was incorporated several days later).
- A February 2000 appraisal valued the property at approximately $1.5 to $1.75 million; Sitogum’s option price was roughly half that value.
- The property was marketed through a different attorney-in-fact, and the owner later signed an arm’s-length contract to sell for $1.5 million.
- After learning of the competing sale, Sitogum recorded a memorandum of option and then exercised the option; the owner refused to convey.
- Sitogum sued for specific performance; the owner moved for summary judgment, asserting the option was unconscionable. The parties agreed there were no material factual disputes relevant to unconscionability.

## Issues

1. Whether the option agreement was unenforceable under the common-law doctrine of unconscionability given the circumstances of its procurement and its terms.
2. Whether unconscionability could be decided as a matter of law on summary judgment where the material facts were undisputed.
3. Whether specific performance was available when the underlying option was unconscionable.

## Decision

- The court granted the owner’s motion for summary judgment.
- The court declared the option unconscionable and unenforceable.
- The court denied Sitogum’s request for specific performance because an unconscionable contract will not be specifically enforced.
- The court resolved unconscionability as a matter of law because the relevant facts were not genuinely disputed.

## Legal Principles

- Unconscionability is a common-law doctrine that permits nonenforcement of an agreement in exceptional cases where enforcement would be unjust despite general respect for freedom of contract.
- Unconscionability analysis considers both:
  - Procedural factors (e.g., inequality of bargaining power, vulnerability, lack of meaningful choice, unfair procurement), and
  - Substantive factors (e.g., overly harsh or one-sided terms, including a gross disparity between price and value).
- A substantial price/value disparity, coupled with circumstances showing exploitation of a vulnerable party and absence of protective advice, can support a finding of unconscionability.
- Where the material facts bearing on unconscionability are undisputed, a court may decide unconscionability on summary judgment.
- Equitable remedies such as specific performance are unavailable to enforce an unconscionable agreement.

## Conclusion

The court voided a discounted real-estate option obtained through a Sitogum-prepared power of attorney from a recently widowed, elderly owner, finding both unfair procurement and a gross price disparity; with no material fact disputes, unconscionability was decided on summary judgment and specific performance was denied.


Sitogum Holdings, Inc. v. Ropes, 352 N.J. Super. 555, 800 A.2d 915 (Ch. Div. 2002)