March 05, 2012
An Unconscionable Final Panel at the Spring Contracts Conference
The last panel of the conference (well, one of two final panels, as the conference usually had two going at once) was dedicated to the doctrine of unconscionability. We regret that we could not do justice to all of the panels at the conference, as we had to choose in each case which of two panels to attend. Similarly, not all of the presentations lent themselves to blogging, so here we will just focus on one of the papers from the unconscionability panel.
Melissa Lonegrass, Associate Professor of Law at LSU's Paul M. Herbert Law Center, presented a version of her article, soon to be appearing (we hope) in a law review near you, "Finding Room for Fairness in Formalism: The Sliding Scale Approach to Unconscionability." She has noted courts' increasing use a sliding scale approach to unconscionability analysis. That is to say, rather than looking at the procedural and substantive prongs of unconscionability independently, courts view both elements in tandem. For example, even if there is little procedural unconscionability, a court might find a contract or a provision in a contract unconscionable if there is a great deal of substantive unconscionabiility (and theoretically vice versa).
Professor Lonegrass's research suggests that there has been relaxation of both prongs in the sliding scale analysis. So courts find procedural unconscionability satisfied whenever there are contracts of adhesion. Courts find substantive unconscionability when the terms are unreasonable. Nobody's conscience needs to be shocked these days.
Professor Lonegrass defends the sliding scale on the ground that it enables courts to be more sensitive to disparities of bargaining power that are inherent in consumer transactions. It also addresses formalist concerns regarding the doctrine of unconscionability and have prevented the doctrine from gaining wider currency. The sliding scale approach retains the procedural inquiry but better enables courts to identify evidence of the lack of genuine consumer assent. By setting aside unhelpful markers of deficient assent, the sliding scale actually makes the application of the unconscionability doctrine more predictable, thus answering concerns about the doctine's effect on the enforceability of commercial agreements.
She recommends a retention of the dual prong approach, but would de-emphasize consumer characteristics of markers of assent in favor of a focus on disaparities in bargaining power. Finally, she encourages courts to embrace a lower threshhold (reasonableness instead of "shocks the conscience") for substantive unconscionability.
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