An Economic Perspective on Legal Remedies for Unconscionable Contracts
(2010)6(1) European Review of Contract Law
11 Pages Posted: 15 Oct 2008 Last revised: 21 Nov 2014
Date Written: October 15, 2008
This paper applies a law-and-economics approach to the study of legal remedies for unconscionable contracts, intending to develop a theoretical framework for the private law remedies in relation to the doctrine of unconscionability. It examines how the different legal remedies will modify a contractor's incentive for unconscionable contracts. It is argued that there is a strong positive correlation between legal deterrence of unconscionable contract and disincentive for a party to trade that should be taken in consideration seriously in designing the legal remedies for unconscionable contract.
Keywords: unconscionability, contract law, legal remedies, rescission, damages
JEL Classification: K12, K13
Suggested Citation: Suggested Citation