Abstract

http://ssrn.com/abstract=1524243
 


 



From a Gasp to a Gamble: A Proposed Test for Unconscionability


Asifa Quraishi-Landes


University of Wisconsin Law School

1991

UC Davis Law Review, Vol. 25, No. 187, 1991
Univ. of Wisconsin Legal Studies Research Paper Archival Collection

Abstract:     
This article takes a comparative approach to propose an improved test for the doctrine of unconscionability in American contract law, by borrowing relevant concepts from Islamic law. Section 2-302 of the Uniform Commercial Code (U.C.C.) identifies "unconscionability" as ground for invalidating a contract, but the legal definition of "unconscionable" in common law and American case law has long been imprecise and unclear, sometimes even as vague as that which would make one "gasp." In this article, I take inspiration from Islamic legal doctrine on oppressive and unfair contracts and, with this in mind, review American case law on unconscionability, noting several common themes about what makes dealings fundamentally unfair. Specifically, I look at Islamic jurisprudence on riba (usury, lit. "increase") which invalidates contracts in which one party receives an undeserved profit at the expense of the other. Riba is of two types: riba al-fadl, in which a contracting party acquires an excess profit, and riba al-nasi'a, in which a party gain an unfair advantage by speculating on uncontrollable risks. In this article, I borrow from these Islamic legal principles, along with some concepts of unfair bargaining power found in American case law, and propose a two-prong test for "unconscionability." The first prong focuses on whether one party achieved a potentially unjust enrichment under the contract, and the second looks to whether there was an oppressive relationship between the contracting parties. A court applying this test must find that a contract meets both prongs in order to declare the contract unconscionable.

Number of Pages in PDF File: 24

Keywords: doctrine of unconscionability, Uniform Commercial Code, Islamic law, oppressive and unfair contracts, riba, unjust enrichment

JEL Classification: K12

Accepted Paper Series





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Date posted: December 20, 2009 ; Last revised: October 5, 2013

Suggested Citation

Quraishi-Landes, Asifa, From a Gasp to a Gamble: A Proposed Test for Unconscionability (1991). UC Davis Law Review, Vol. 25, No. 187, 1991; Univ. of Wisconsin Legal Studies Research Paper Archival Collection. Available at SSRN: http://ssrn.com/abstract=1524243

Contact Information

Asifa Quraishi-Landes (Contact Author)
University of Wisconsin Law School ( email )
975 Bascom Mall
Madison, WI 53706
United States
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