Unconscionability Wars
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Unconscionability in Contracts Between Merchants
SMU Law Review Volume 40 Issue 4 Article 4 1986 Unconscionability in Contracts between Merchants Jane P. Mallor Follow this and additional works at: https://scholar.smu.edu/smulr Recommended Citation Jane P. Mallor, Unconscionability in Contracts between Merchants, 40 SW L.J. 1065 (1986) https://scholar.smu.edu/smulr/vol40/iss4/4 This Article is brought to you for free and open access by the Law Journals at SMU Scholar. It has been accepted for inclusion in SMU Law Review by an authorized administrator of SMU Scholar. For more information, please visit http://digitalrepository.smu.edu. UNCONSCIONABILITY IN CONTRACTS BETWEEN MERCHANTS by Jane P. Mallor* HE doctrine of unconscionabilityl has played a role in Anglo-Ameri- can contract law since at least the eighteenth century. 2 In the past twenty years, however, the doctrine has enjoyed an ascendancy that could scarcely have been dreamed of by the chancellors in equity who first employed the doctrine. 3 Its codification in section 2-302 of the Uniform Commercial Code of almost all states,4 and its adoption and application by courts in a wide variety of cases outside the scope of the Uniform Commer- cial Code,5 have brought unconscionability into the forefront of modem American contract law. * B.A., J.D., Indiana University. Associate Professor of Business Law, Indiana Univer- sity School of Business. 1. "Unconscionability is the rubric under which the judiciary may refuse to enforce un- fair or oppressive contracts in the absence of fraud or illegality." Stanley A. Klopp, Inc. v. John Deere Co., 510 F. Supp. -
Unconscionability Wars †
Copyright 2012 by Northwestern University School of Law Printed in U.S.A. Northwestern University Law Review Vol. 106, No. 1 UNCONSCIONABILITY WARS † David Horton ABSTRACT —For decades, courts have invoked the contract defense of unconscionability to invalidate one-sided arbitration clauses. Recently, however, a growing cadre of judges, scholars, and litigants has asserted that this practice is incompatible with the Federal Arbitration Act (FAA). Some claim that the FAA only permits arbitrators—not courts—to find arbitration clauses to be unconscionable. Others, such as Justice Thomas—who provided the decisive vote in the Court’s recent decision in AT&T Mobility LLC v. Concepcion —contend that the statute’s plain language immunizes arbitration clauses from unconscionability in all circumstances. This Essay responds to these arguments. In particular, it challenges the cornerstone of both anti-unconscionability theories: that the FAA’s text only allows courts to strike down arbitration clauses for reasons that relate to the “making” of the agreement to arbitrate. AUTHOR —Acting Professor of Law, University of California, Davis, School of Law (effective July 2012); Associate Professor of Law, Loyola Law School, Los Angeles (through July 2012). Thank you to Hiro Aragaki and Stephen J. Ware for helpful comments. † This Essay was originally published in the orthwestern University Law Review Colloquy on August 22, 2011, 106 NW. U. L. REV . COLLOQUY 13 (2011), http://www.law.northwestern.edu/ lawreview/colloquy/2011/17/LRColl2011n17Horton.pdf. 387 N O R T H W E S T E R N U N I V E R S I T Y L A W R E V I E W INTRODUCTION ............................................................................................................ -
A New Look at Contract Mistake Doctrine and Personal Injury Releases
19 NEV. L.J. 535, GIESEL 4/25/2019 8:36 PM A NEW LOOK AT CONTRACT MISTAKE DOCTRINE AND PERSONAL INJURY RELEASES Grace M. Giesel* “[C]ourts cannot make for the parties better agreements than they themselves have been satisfied to make.”1 TABLE OF CONTENTS INTRODUCTION ............................................................................................... 536 I. THE SETTING: THE TYPICAL CASE ..................................................... 542 II. CONTRACT DOCTRINE APPLIES .......................................................... 544 III. CONTRACT MISTAKE DOCTRINE ......................................................... 545 IV. TRADITIONAL APPLICATION OF CONTRACT DOCTRINE TO THE TYPICAL PERSONAL INJURY RELEASE SITUATION.............................. 547 A. A Shared Mistake of Fact and Not a Speculation or Prediction . 547 B. The Injured Party Has the Risk of Mistake by Conscious Ignorance .................................................................................... 548 C. The Release Places the Risk of Mistake on the Injured Party ..... 549 D. Traditional Application of the Unilateral Mistake Doctrine to the Typical Personal Injury Release Situation ............................ 554 E. Conclusions about Traditional Application of the Mistake Doctrine ...................................................................................... 555 V. COURTS’ TREATMENT OF PERSONAL INJURY RELEASES .................... 555 A. Mistake Doctrine Applies with an Unknown Injury But Not with an Unknown Consequence of a Known Injury ................... -
Beyond Unconscionability: the Case for Using "Knowing Assent" As the Basis for Analyzing Unbargained-For Terms in Standard Form Contracts
Beyond Unconscionability: The Case for Using "Knowing Assent" as the Basis for Analyzing Unbargained-for Terms in Standard Form Contracts Edith R. Warkentinet I. INTRODUCTION People who sign standard form contracts' rarely read them.2 Coun- sel for one party (or one industry) generally prepare standard form con- tracts for repetitive use in consecutive transactions.3 The party who has t Professor of Law, Western State University College of Law, Fullerton, California. The author thanks Western State for its generous research support, Western State colleague Professor Phil Merkel for his willingness to read this on two different occasions and his terrifically helpful com- ments, Whittier Law School Professor Patricia Leary for her insightful comments, and Professor Andrea Funk for help with early drafts. 1. Friedrich Kessler, in a pioneering work on contracts of adhesion, described the origins of standard form contracts: "The development of large scale enterprise with its mass production and mass distribution made a new type of contract inevitable-the standardized mass contract. A stan- dardized contract, once its contents have been formulated by a business firm, is used in every bar- gain dealing with the same product or service .... " Friedrich Kessler, Contracts of Adhesion- Some Thoughts About Freedom of Contract, 43 COLUM. L. REV. 628, 631-32 (1943). 2. Professor Woodward offers an excellent explanation: Real assent to any given term in a form contract, including a merger clause, depends on how "rational" it is for the non-drafter (consumer and non-consumer alike) to attempt to understand what is in the form. This, in turn, is primarily a function of two observable facts: (1) the complexity and obscurity of the term in question and (2) the size of the un- derlying transaction. -
Tracing Is a Process Not a Remedy
Tracing - Scenario 1(b): Trustee Mixes Trust Money - Tracing is a process not a remedy. With His Own In His Account, subsequently - It allows us to identify a new asset as the purchases property with some money in the substitute for the old (Foskett v McKeown). account, then exhausts remaining money. - Tracing follows the value of the beneficiaries - SOLUTION: Re Oatway: We get an property, not the property itself (following). exception to the rule in Hallett’s estate: if the wrongdoer purchased assets which still exist, Distinguishing Tracing; Following & Claiming then it is presumed that he did so with the - Following is the process of following the same stolen money and the beneficiaries are asset as it moves from hand to hand. entitled to the assets. - Claiming refers to the process of recovering property, or the substitute for that property (This - Scenario 1(c): Trustee Mixes Money With His refers to the Barnes v Addy; knowing receipt, Own In His Account, and makes payment in knowing assistance doctrine - MUST and out of that account. CONSIDER THIS AFTER TRACING). - SOLUTION: Lofts v McDonald: Lowest Intermediate Balance Rule: trust cannot claim more than the lowest intermediate balance Tracing at Common Law - credited to the wrongdoer’s bank account Tracing is not unique to equity, however at CL it - If it went up from the lowest point, that is requires that the property you are tracing is not the trust’s money. identifiable, giving rise to problems with banks. - - Although you are deprived of a proprietary Equity has developed rules for identifying remedy, not personal remedies. -
Asset Tracing in the British Virgin Islands
Article Asset Tracing in the British Virgin Islands In this article, we will discuss some of the tools available to a party in the British Virgin Islands to seek to recover property, or proceeds of property, which have been misappropriated. It is not surprising that in some cases, the identity of the wrongdoer or the whereabouts of the misappropriated property is unknown. Against that background, it is worth noting that while a BVI, and whether there has been any past judgment which company incorporated in the BVI is required to maintain may shed light on assets held by the company. In addition, certain records at the office of its registered agent (such as upon application the BVI Land Registry can provide certain its memorandum and articles of association, register of details regarding the owner of BVI land or real estate. directors, register of members, minutes of members’ and However, this requires the applicant to first be able to directors’ meetings and copies of resolutions), there is no identify the location or owner of the land. A party may also right for the public to inspect such records. Indeed, obtain certain information regarding vessels registered under confidentiality of corporate documents and information is a BVI flag from the BVI Ship Registry. one of the key attractions of incorporating a company in the BVI. BVI companies are not generally required to maintain or What is “tracing”? file statutory accounts, or meet any particular set of international accounting standards. Under section 98 of the Tracing consists of a series of rules developed by equity to BVI Business Companies Act 2004, all that a company is deal with situations where assets have been required to maintain are records “sufficient to show and misappropriated and the wrongdoer is not in a position to explain the company’s transactions” and which “will, at any compensate, or money compensation is not adequate. -
“Clean Hands” Doctrine
Announcing the “Clean Hands” Doctrine T. Leigh Anenson, J.D., LL.M, Ph.D.* This Article offers an analysis of the “clean hands” doctrine (unclean hands), a defense that traditionally bars the equitable relief otherwise available in litigation. The doctrine spans every conceivable controversy and effectively eliminates rights. A number of state and federal courts no longer restrict unclean hands to equitable remedies or preserve the substantive version of the defense. It has also been assimilated into statutory law. The defense is additionally reproducing and multiplying into more distinctive doctrines, thus magnifying its impact. Despite its approval in the courts, the equitable defense of unclean hands has been largely disregarded or simply disparaged since the last century. Prior research on unclean hands divided the defense into topical areas of the law. Consistent with this approach, the conclusion reached was that it lacked cohesion and shared properties. This study sees things differently. It offers a common language to help avoid compartmentalization along with a unified framework to provide a more precise way of understanding the defense. Advancing an overarching theory and structure of the defense should better clarify not only when the doctrine should be allowed, but also why it may be applied differently in different circumstances. TABLE OF CONTENTS INTRODUCTION ................................................................................. 1829 I. PHILOSOPHY OF EQUITY AND UNCLEAN HANDS ...................... 1837 * Copyright © 2018 T. Leigh Anenson. Professor of Business Law, University of Maryland; Associate Director, Center for the Study of Business Ethics, Regulation, and Crime; Of Counsel, Reminger Co., L.P.A; [email protected]. Thanks to the participants in the Discussion Group on the Law of Equity at the 2017 Southeastern Association of Law Schools Annual Conference, the 2017 International Academy of Legal Studies in Business Annual Conference, and the 2018 Pacific Southwest Academy of Legal Studies in Business Annual Conference. -
Asset Tracing and Recovery Reassessed
Asset tracing and recovery reassessed Nicole Sandells QC Miles Harris 4 New Square Professional Liability & Regulatory Conference 4 February 2020 This material was provided for the 4 New Square Professional Liability & Regulatory Conference on 4 February 2020. It was not intended for use and must not be relied upon in relation to any particular matter and does not constitute legal advice. It has now been provided without responsibility by its authors. 4 NEW SQUARE T: +44 (0) 207 822 2000 LINCOLN’S INN F: +44 (0) 207 822 2001 LONDON WC2A 3RJ DX: LDE 1041 WWW.4NEWSQUARE.COM E: [email protected] Nicole Sandells QC Call: 1994 Silk: 2018 Nicole's practice in recent years has focused heavily on financial and property law, civil fraud, restitution, trusts, probate and equitable remedies alongside Chambers' mainstream professional indemnity work. She has significant experience of unjust enrichment, subrogation, breach of trust and fiduciary duty claims. She is never happier than when finding novel answers to tricky problems. Nicole is described as ‘a mega-brain, with encyclopaedic legal knowledge and the ability to cut through complex legal issues with ease’ and 'a master tactician who is exceptionally bright and has a fantastic ability to condense significant evidential information' (Legal 500). Apparently, she is also “exceptionally bright and a ferocious advocate. She gives tactical advice and is a pleasure to work with. Clients speak extremely highly of her.” “If you want someone to think outside of the box and really come up with an innovative position, then she’s an excellent choice.” – Chambers & Partners, 2020 Professional Negligence. -
Contract Basics for Litigators: Illinois by Diane Cafferata and Allison Huebert, Quinn Emanuel Urquhart & Sullivan, LLP, with Practical Law Commercial Litigation
STATE Q&A Contract Basics for Litigators: Illinois by Diane Cafferata and Allison Huebert, Quinn Emanuel Urquhart & Sullivan, LLP, with Practical Law Commercial Litigation Status: Law stated as of 01 Jun 2020 | Jurisdiction: Illinois, United States This document is published by Practical Law and can be found at: us.practicallaw.tr.com/w-022-7463 Request a free trial and demonstration at: us.practicallaw.tr.com/about/freetrial A Q&A guide to state law on contract principles and breach of contract issues under Illinois common law. This guide addresses contract formation, types of contracts, general contract construction rules, how to alter and terminate contracts, and how courts interpret and enforce dispute resolution clauses. This guide also addresses the basics of a breach of contract action, including the elements of the claim, the statute of limitations, common defenses, and the types of remedies available to the non-breaching party. Contract Formation to enter into a bargain, made in a manner that justifies another party’s understanding that its assent to that 1. What are the elements of a valid contract bargain is invited and will conclude it” (First 38, LLC v. NM Project Co., 2015 IL App (1st) 142680-U, ¶ 51 (unpublished in your jurisdiction? order under Ill. S. Ct. R. 23) (citing Black’s Law Dictionary 1113 (8th ed.2004) and Restatement (Second) of In Illinois, the elements necessary for a valid contract are: Contracts § 24 (1981))). • An offer. • An acceptance. Acceptance • Consideration. Under Illinois law, an acceptance occurs if the party assented to the essential terms contained in the • Ascertainable Material terms. -
Unconscionability As an Underlying Concept in Equity
THE DENNING LAW JOURNAL UNCONSCIONABILITY AS A UNIFYING CONCEPT IN EQUITY Mark Pawlowski* ABSTRACT This article seeks to examine the extent to which a unified concept of unconscionability can be used to rationalise related doctrines of equity, in particular, in the areas of (1) unconscionable bargains, undue influence and duress (2) proprietary estoppel (3) knowing receipt liability and (4) relief against forfeitures. The conclusion is that such a process of amalgamation may provide a principled doctrinal basis for equity’s intervention which has already found favour in the English courts. INTRODUCTION A recent discernible trend in equity has been the willingness of the English courts to adopt a broader-based doctrine of unconscionability as underlying proprietary estoppel claims and the personal liability of a stranger to a trust who has knowingly received trust property in breach of trust. The decisions in Gillett v Holt,1 Jennings v Rice2 and Campbell v Griffin3 in the context of proprietary estoppel and Bank of Credit and Commerce International (Overseas) Ltd v Akindele4 on the subject of receipt liability, demonstrate the judiciary’s growing recognition that the concept of unconscionability provides a useful mechanism for affording equitable relief against the strict insistence on legal rights or unfair and oppressive conduct. This, in turn, prompts the question whether there are other areas which would benefit from a rationalisation of principles under the one umbrella of unconscionability. The process of amalgamation, it is submitted, would be particularly useful in areas where there are currently several related (but distinct) doctrines operating together so as to give rise to confusion and overlap in the same field of law. -
Thomas, Et Al. V. Othman, Et
IN THE COURT OF APPEALS FIRST APPELLATE DISTRICT OF OHIO HAMILTON COUNTY, OHIO RICHARD THOMAS, : APPEAL NO. C-160827 TRIAL NO. A-1601001 and : GAIL THOMAS, : O P I N I O N. Plaintiffs-Appellants, : vs. : AKRAM OTHMAN, : and : MARK WOEHLER, : Defendants-Appellees. : Civil Appeal From: Hamilton County Court of Common Pleas Judgment Appealed from is: Affirmed Date of Judgment Entry on Appeal: November 8, 2017 William Flax, for Plaintiffs-Appellants, James R. Hartke, for Defendant-Appellee Akram Othman, George M. Parker, for Defendant-Appellee Mark Woehler. OHIO FIRST DISTRICT COURT OF APPEALS CUNNINGHAM, Presiding Judge. {¶1} Plaintiffs-appellants Richard and Gail Thomas appeal from the judgment of the Hamilton County Court of Common Pleas granting the motion of defendants-appellees Akram Othman and Mark Woehler to dismiss the amended complaint for failure to state a claim upon which relief could be granted, pursuant to Civ.R. 12(B)(6). For the reasons that follow, we affirm. I. Background Facts and Procedure {¶2} This appeal arises from the Thomases’ efforts to recover from Othman and Woehler a portion of the retirement funds the Thomases lost after investing them in a Ponzi scheme operated by Glen Galemmo. According to the allegations in the amended complaint, Galemmo was convicted of securities fraud in the case United States v. Galemmo, Case No. 1:13-CR-00141, for operating a “complex,” multi-year “Ponzi scheme.” The Thomases, Othman, and Woehler were all investors in the scheme, and are all members of the plaintiff class of “Net Losers” investors— investors who lost more than their principal investment—in several civil class-action lawsuits which were referenced in the Thomases’ complaint. -
Unconscionability As a Sword: the Case for an Affirmative Cause of Action
Unconscionability as a Sword: The Case for an Affirmative Cause of Action Brady Williams* Consumers are drowning in a sea of one-sided fine print. To combat contractual overreach, consumers need an arsenal of effective remedies. To that end, the doctrine of unconscionability provides a crucial defense against the inequities of rigid contract enforcement. However, the prevailing view that unconscionability operates merely as a “shield” and not a “sword” leaves countless victims of oppressive contracts unable to assert the doctrine as an affirmative claim. This crippling interpretation betrays unconscionability’s equitable roots and absolves merchants who have already obtained their ill-gotten gains. But this need not be so. Using California consumer credit law as a backdrop, this Note argues that the doctrine of unconscionability must be recrafted into an offensive sword that provides affirmative relief to victims of unconscionable contracts. While some consumers may already assert unconscionability under California’s Consumers Legal Remedies Act, courts have narrowly construed the Act to exempt many forms of consumer credit. As a result, thousands of debtors have remained powerless to challenge their credit terms as unconscionable unless first sued by a creditor. However, this Note explains how a recent landmark ruling by the California Supreme Court has confirmed a novel legal theory that broadly empowers consumers—including debtors—to assert unconscionability under the State’s Unfair Competition Law. Finally, this Note argues that unconscionability’s historical roots in courts of equity—as well as its treatment by the DOI: https://doi.org/10.15779/Z382B8VC3W Copyright © 2019 California Law Review, Inc. California Law Review, Inc.