Abstract

http://ssrn.com/abstract=2457483
 


 



The Rise and Fall of Unconscionability as the 'Law of the Poor'


Anne Fleming


Georgetown University Law Center

June 21, 2014

Georgetown Law Journal, Vol. 102, No. 5, 2014

Abstract:     
What happened to unconscionability? Here’s one version of the story: The doctrine of unconscionability experienced a brief resurgence in the mid-1960s at the hands of naive, left-liberal, activist judges, who used it to rewrite private consumer contracts according to their own sense of justice. These folks meant well, no doubt, much like present-day consumer protection crusaders who seek to ensure the “fairness” of financial products and services. But courts’ refusal to enforce terms they deemed "unconscionable” served only to increase the cost of doing business with low-income households. Judges ended up hurting the very people they were trying to help. In the face of incisive criticism, judicial enthusiasm for the doctrine of unconscionability quickly faded. A new consensus emerged in favor of legislation requiring better disclosure of consumer contract terms ex ante, rather than ex post judicial review.

This Article presents a different narrative, one that is informed by extensive research in previously untapped archival sources. In this story, the wise legislature does not overrule the misguided courts. On the contrary, it reveals that lawmakers laid the groundwork for the judicial revival of unconscionability, and then rewrote statutory rules to codify the ensuing court decisions. In the District of Columbia, home to the famous Williams v. Walker-Thomas Furniture Co. litigation, the legislature revived unconscionability through the enactment of the Uniform Commercial Code (U.C.C.), which reintroduced the once-archaic doctrine into the legal vernacular. Just as the U.C.C. drafters intended, unconscionability review allowed courts to do openly what they had been doing covertly for years — refuse to enforce harsh, one-sided bargains as written. In 1965, the D.C. Circuit seized the opportunity unconscionability offered to prevent the loss of a poor woman’s furniture. But the Williams litigation also did something more. It drew public attention to the controversy before the court and alerted D.C. lawmakers to a recurring problem in need of a legislative fix. In response, local leaders set to work drafting consumer credit reform legislation. Lawmakers eventually adopted a firm set of rules to govern “installment” sales contracts in the District of Columbia, including a ban on the objectionable contract term at issue in Williams.

In this narrative, judges and legislators did not advance competing regulatory visions. They agreed on the need for substantive limits on installment sales to poor borrowers. Moreover, contrary to what some scholars might predict, litigation did not divert scarce resources down a dead-end path. Rather, it catalyzed the process of legislative change, raising public consciousness of problems in the low-income marketplace and fueling the drive for substantive reforms on the local level.

Appendix A provides the full text of the Walker Thomas Furniture Company contract.

Number of Pages in PDF File: 59

Keywords: Legal history, U.S. history, UCC, unconscionability, poverty, low-income, consumer credit

Accepted Paper Series





Download This Paper

Date posted: June 23, 2014  

Suggested Citation

Fleming, Anne, The Rise and Fall of Unconscionability as the 'Law of the Poor' (June 21, 2014). Georgetown Law Journal, Vol. 102, No. 5, 2014. Available at SSRN: http://ssrn.com/abstract=2457483

Contact Information

Anne Fleming (Contact Author)
Georgetown University Law Center ( email )
600 New Jersey Avenue, NW
Washington, DC 20001
United States
Feedback to SSRN


Paper statistics
Abstract Views: 613
Downloads: 144
Download Rank: 120,541

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo2 in 0.578 seconds