Does Unconscionability Theory Lead to Greater Economic Problems?

Today is the second day of the International Contracts Conference hosted this year by Stetson University College of Law. Professor Xi George Zhou of the University of Sheffield presented his paper, An Economic Perspective on Legal Remedies for Unconscionable Contracts, where he argues that there are disincentives to trade created by unconscionability doctrine, precaution problems and potential abuse of rights. His paper asks whether a higher deterrence model leads to greater economic problems. He proposes that creating an effective remedy for unconscionable behavior may require a legal remedy that is lower, as a high sanction may result in less economic transactions due to precautions employed by traders. Thus, it is impossible to eliminate bad behavior through deterrence alone. In order to use any legal mechanism we need to focus on the effectiveness of the tactic. There are risks to all deterrence models.

Professor Zhou also presented a call for papers for the Society of Legal Scholars Conference September 5-8. This year's topic is Law in Politics, Politics in Law. All papers on any aspect of contract, commercial and consumer law are welcome, whether on topic or not. Paper proposals are due by March 4, 2011 to Professor Zhou at qi.zhou@sheffield.ac.uk.

-jsm