Contract terms that limit or exclude consequential damages are generally enforceable unless what?

• A. They are illegal.
• B. The limitation is unconscionable.
• C. They are not in writing.
• D. They cannot be modified.

Answer: (B)

Limiting or excluding consequential damages is generally enforceable because parties can allocate risk in a contract. The key exception is unconscionability: if the term is unreasonably harsh or was imposed in a way that leaves one party with no meaningful choice, a court may refuse to enforce it. Unconscionability has two sides—procedural (how the term was presented, whether there was meaningful negotiation) and substantive (the term itself is unfair or overly favorable to one side). When a damages cap or exclusion creates a stark, one-sided imbalance and the weaker party had little to no bargaining power, it can be deemed unenforceable. Other issues like illegality, writing requirements, or the ability to modify the clause are separate concerns and do not automatically render a damages limitation unenforceable.