Cardozo's Opinion in Lady Lucy's Case: Formative Unconscionability, Impracticality, and Judicial Abuse

Abstract

Judge Cardozo's opinion in Wood v. Lucy, Lady Duff-Gordon used the concept of unconscionability not to invalidate a contract or clause, but to create a contract that would not otherwise have existed ("formative unconscionability"). That is, he justified holding against Lady Lucy on the ground that a finding that Wood's promises were illusory (and that therefore there was no contract between them) would have unfairly put Lady Lucy at Wood's mercy - in other words, that a finding of no contract would have made her the victim of unfair surprise. Anomalously, therefore, Wood won his contract action against Lady Lucy by successfully arguing, in effect, the unconscionable nature of his own promise.

Also, Cardozo's decision unwisely created serious practical difficulties for a lawyer representing a client in Lady Lucy's position. Assuming that Wood had in fact failed to produce endorsements (and he did not claim that he had benefitted her in any way), a conscientious lawyer would be hesitant to recommend that Lady Lucy sue him; moreover, a prudent lawyer would be hesitant to take the case on a contingent fee. Such litigation would have required (1) persuading a court that Wood's promises were not illusory; (2) carrying the burden of proving that Wood's efforts on her behalf were, in fact, less than reasonable; and (3) proving with "reasonable certainty" (as Cardozo would have required) how much money Wood would have made on her behalf if he had been diligent in his efforts.

In addition, Cardozo's belittling treatment of Lady Lucy in his opinion illustrates his sometime practice of abusing his power as a judge by neglecting, or even demeaning, the humanity of parties who appeared before him.

Taken as a whole, therefore, Cardozo's opinion in Wood v. Lady Lucy Duff-Gordon is one more to be criticized than to be celebrated.

Keywords: Contracts, Cardozo, Lucy, Lady Duff-Gordon, Unconscionability, Judges' Ethics (or Judicial Ethics), Teaching Contracts