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The Unconscionability Doctrine in U.S. Contract Law

Gustafsson, Per LU (2011) JURM01 20102
Department of Law
Abstract (Swedish)
Unconscionability är en grund för jämkning eller ogiltigförklaring av avtal som typiskt sett används vid en kombination av oskäliga avtalsvillkor och brister i själva avtalssituationen. Regeln har sitt ursprung huvudsakligen i den engelska rättens equity och kan där spåras till åtminstone 1400-talet. Unconscionability blev en del av amerikansk avtalsrätt genom införandet av engelsk rätt i de nybildade delstaterna. Dess nuvarande användning och innebörd är i stor utsträckning resultatet av lagstiftningsprojektet Uniform Commercial Code (UCC). Sammanslagningen av equity och common law samt kodifieringen har föranlett ett allmänt erkännande av unconscionability i den amerikanska avtalsrätten.

Det finns ingen tydlig definition av... (More)
Unconscionability är en grund för jämkning eller ogiltigförklaring av avtal som typiskt sett används vid en kombination av oskäliga avtalsvillkor och brister i själva avtalssituationen. Regeln har sitt ursprung huvudsakligen i den engelska rättens equity och kan där spåras till åtminstone 1400-talet. Unconscionability blev en del av amerikansk avtalsrätt genom införandet av engelsk rätt i de nybildade delstaterna. Dess nuvarande användning och innebörd är i stor utsträckning resultatet av lagstiftningsprojektet Uniform Commercial Code (UCC). Sammanslagningen av equity och common law samt kodifieringen har föranlett ett allmänt erkännande av unconscionability i den amerikanska avtalsrätten.

Det finns ingen tydlig definition av unconscionability vare sig i UCC eller i det s.k. Restatement. Den officiella kommentaren till UCC antyder att syftet är att förhindra förtryck och överrumpling. Detta har tolkats till att innefatta såväl procedurella som substantiva faktorer. Procedurella faktorer innebär brister i avtalssituationen, speciellt utnyttjande av en part med jämförelsevis begränsad erfarenhet och avtalsvana, bedräglig utformning av avtalshandlingen och tveksamma försäljningsmetoder. Substantiva faktorer avser avtalsvillkor i och för sig; det rör sig ofta om ett extremt ensidigt avtal eller en synnerligen stötande klausul. Det finns olika åsikter om huruvida både procedurella och substantiva faktorer krävs för att ett avtal ska jämkas eller ogiltigförklaras; ett vanligt synsätt är att när proceduren varit behäftad med avsevärda brister krävs mindre i form av substantiva faktorer och vice versa.

Kritik av unconscionability är inte sällan ideologisk och slutsatserna spänner från obegränsad expansion till fullständigt avskaffande. Forskare med ett nationalekonomiskt perspektiv menar att den nuvarande utformningen liksom en expansion är ex ante negativt även för de som skyddas av doktrinen; forskning inom beteendeekonomi tyder dock på att detta inte alltid stämmer. Arthur Allen Leff har framfört en erkänt kraftfull kritik av unconscionability fokuserad på bristen på klarhet och vägledning i regeln. Min analys undersöker dels vissa nationalekonomiska implikationer av unconscionability och dels huruvida den abstrakta utformningen av regeln är ändamålsenlig. Slutsatsen är att doktrinen under vissa förutsättningar kan vara nationalekonomiskt försvarbar och att en abstrakt regel sannolikt är ofrånkomlig i fall som involverar ett flertal mindre stötande element som endast i kombination når en nivå där ett domstolsingripande är rättfärdigat. (Less)
Abstract
Unconscionability is a contract defense typically advanced in cases in which there is a combination of unfair contract terms and deficient bargaining. Its origin is primarily in equity as practiced in England, where the doctrine can be traced back to at least the fifteenth century. Unconscionability entered American contract law through the adoption of English law in the former colonies. The concept received its greatest impetus from the promulgation of the Uniform Commercial Code (UCC) and section 2-302. The merger of equity and common law as well as the codification led to the general recognition of unconscionability in contract law.

There exists no clear definition of unconscionability in either the UCC or the Restatement. The... (More)
Unconscionability is a contract defense typically advanced in cases in which there is a combination of unfair contract terms and deficient bargaining. Its origin is primarily in equity as practiced in England, where the doctrine can be traced back to at least the fifteenth century. Unconscionability entered American contract law through the adoption of English law in the former colonies. The concept received its greatest impetus from the promulgation of the Uniform Commercial Code (UCC) and section 2-302. The merger of equity and common law as well as the codification led to the general recognition of unconscionability in contract law.

There exists no clear definition of unconscionability in either the UCC or the Restatement. The official comment for UCC section 2-302 suggests that the purpose is to prevent oppression and unfair surprise. This has been interpreted to entail procedural as well as substantive factors. Procedural unconscionability involves deficiencies in how the contract came to be, especially exploitation of discrepancies in status and sophistication of the parties, deceptive appearance or language of the contract and questionable bargaining. Substantive unconscionability refers to the contract terms per se; it is often a matter of an excessively one-sided contract or a particularly offensive term. There are differing opinions on whether both procedural and substantive unconscionability is required for an unconscionability ruling; a commonly adopted approach is the idea of a sliding scale: where there have been extensive procedural shenanigans less is required in terms of contractual imbalance and vice versa.

Criticism of the unconscionability doctrine is often ideological and suggestions range from uninhibited expansion to demands of complete abolition. Scholars within law and economics argue that the current or expanded use of unconscionability hurts both parties ex ante, although behavioral economics seems to suggest that this may not always be true. Professor Arthur Allen Leff has offered a potent critique of unconscionability focusing on the lack of clarity and guidance in the rule. My analysis considers the economics of unconscionability and whether an abstract rule against unfair contracts is appropriate. I conclude that, given certain conditions, the doctrine might be defensible from an economic perspective and that an abstract rule is likely necessary to handle cases involving numerous minor contract offenses only together reaching a level warranting judicial interference. (Less)
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author
Gustafsson, Per LU
supervisor
organization
course
JURM01 20102
year
type
H3 - Professional qualifications (4 Years - )
subject
keywords
avtalsrätt, civilrätt, förmögenhetsrätt, unconscionability, contract law, oskälighet, amerikansk rätt
language
English
id
1761847
date added to LUP
2011-01-19 09:49:24
date last changed
2011-01-19 09:49:24
@misc{1761847,
  abstract     = {Unconscionability is a contract defense typically advanced in cases in which there is a combination of unfair contract terms and deficient bargaining. Its origin is primarily in equity as practiced in England, where the doctrine can be traced back to at least the fifteenth century. Unconscionability entered American contract law through the adoption of English law in the former colonies. The concept received its greatest impetus from the promulgation of the Uniform Commercial Code (UCC) and section 2-302. The merger of equity and common law as well as the codification led to the general recognition of unconscionability in contract law.

There exists no clear definition of unconscionability in either the UCC or the Restatement. The official comment for UCC section 2-302 suggests that the purpose is to prevent oppression and unfair surprise. This has been interpreted to entail procedural as well as substantive factors. Procedural unconscionability involves deficiencies in how the contract came to be, especially exploitation of discrepancies in status and sophistication of the parties, deceptive appearance or language of the contract and questionable bargaining. Substantive unconscionability refers to the contract terms per se; it is often a matter of an excessively one-sided contract or a particularly offensive term. There are differing opinions on whether both procedural and substantive unconscionability is required for an unconscionability ruling; a commonly adopted approach is the idea of a sliding scale: where there have been extensive procedural shenanigans less is required in terms of contractual imbalance and vice versa.

Criticism of the unconscionability doctrine is often ideological and suggestions range from uninhibited expansion to demands of complete abolition. Scholars within law and economics argue that the current or expanded use of unconscionability hurts both parties ex ante, although behavioral economics seems to suggest that this may not always be true. Professor Arthur Allen Leff has offered a potent critique of unconscionability focusing on the lack of clarity and guidance in the rule. My analysis considers the economics of unconscionability and whether an abstract rule against unfair contracts is appropriate. I conclude that, given certain conditions, the doctrine might be defensible from an economic perspective and that an abstract rule is likely necessary to handle cases involving numerous minor contract offenses only together reaching a level warranting judicial interference.},
  author       = {Gustafsson, Per},
  keyword      = {avtalsrätt,civilrätt,förmögenhetsrätt,unconscionability,contract law,oskälighet,amerikansk rätt},
  language     = {eng},
  note         = {Student Paper},
  title        = {The Unconscionability Doctrine in U.S. Contract Law},
  year         = {2011},
}