A statutory provision in Nordic contract law provides for the invalidation or modification of contract if the contract is unreasonable. This rule, which contains a legal standard, deviates from the principles of pacta sunt servanda, freedom of contract and the contracting parties‘ fiduciary duties. Article 36 of the 1936 Icelandic Contract Act stipulates that in order for the courts to review a contract‘s unreasonableness, they must assess (1) its content, (2) the bargaining position of the contracting parties, (3) the circumstances when the parties entered into the contract, and (4) circumstances subsequent to the material time. Icelandic Supreme Court Case law provides further guidance in the assessment where several factors have been emphasized, including the (5) burden of proof, (6) significance of the contracting parties‘ bargaining position, (7) the nature of contract as a product of negotiations that balance the contractual relationship, and (8) the view that business judgment is excluded from court review. The Icelandic Supreme Court resorted to Article 36 in its opinion of 19 November 2015, and modified a loan agreement‘s provisions on the equivalence of interests and default interests due to its unreasonableness. This paper argues that the Supreme Court‘s opinion lacks an appropriate portrayal of the Court‘s step-by-step fairness review. As a result, the legitimacy of the opinion‘s findings, that may very well be substantively correct, is subject to ambiguities. Second, this paper argues that the opinion plausibly entails an unreasonable end-result for the contract‘s creditor. Third, this paper concludes that the opinion signifies the importance of thorough reasoning when courts apply legal standards, such as Article 36 of the Contract Act.