N.E. p. 301), the High Court noted that "(l)iquidated damages constitute the
compensation which the parties have agreed must be paid in satisfaction of the loss or
injury which will follow (sic) from a breach of contract. They must bear
reasonable proportion to the actual loss. Otherwise, an agreement to pay a fixed sum,
upon a breach of contract, is an agreement to pay a penalty, though the parties have
chosen to call it liquidated damages,' and is unenforceable". UCC §2—302
of the code which articulates the principle of unconscionability provides in pertinent part:
"If the court as a matter of law finds the contract or any clause of the contract to have
been unconscionable at the time it was made, the court may refuse to enforce the
contract, or it may enforce the remainder of the contract without the unconscionable
clause, or it may so limit the application of any unconscionable clause so as to avoid any
unconscionable result." The principle underlying this section is the prevention of
oppression and unfair surprise and not of disturbance of allocation of risk (Official
Comment, McKinney's Cons. Laws of NY, Book 62 1/2 , part I, Uniform Commercial
Code, s 2—302, p. 193). It should be emphasized that in contrast to subdivision
(1) of §2—718 of the code discussed above, § 2—302 is limited
to and focuses only on the time of contracting as the vantage point for the determination
of unconscionability.
After a review of the evidence, the High Court concluded that "under the
circumstances of this case, the provision for payment of attorney's fees does not fail on
the ground of unconscionability, although in a case involving disparity of bargaining
power or oppressive practices, this principle may be the basis for invalidating such a