Judge-Made Contracts: Reconstructing Unconscionable Contracts
Although unconscionability is thought to be a nearly exhausted topic, there are still some disputed issues regarding its remedies. This paper discusses one of these issues, namely the judicial reconstruction of unconscionable contracts or unreasonable contract clauses. More concretely, in many legal systems the judge is granted, at least in some cases, the power to revise the terms of unconscionable contracts: he may substitute "reasonable" terms for the "unreasonable" ones so that the contract remains valid. Nevertheless, an attempt by the judge to adjust an "unreasonable" term will create opportunism from both sides and will lead to arbitrary judicial decisions, thus upsetting the security of transactions and inevitably leading to higher transaction costs. Hence we argue that, with a few exceptions pertaining to monopoly or collusion situations, the judge should only decide between enforceability and non-enforceability of the contract or the clause. If the parties want their void contract to be enforced they can always renegotiate after the court decision and modify it themselves.
Duress in Contracts: An Economic Analysis
This paper is forthcoming as a chapter in Contract Law and Economics, ed. Gerrit de Geest (Cheltenham: Elgar 2009) [Elgar Encyclopedia of Law and Economics 2nd ed.] and its goal is to provide an overview of the economic analyses of contractual duress. The focus is on distinctive features of the economic perspective on the duress doctrine, as developed in the theoretical literature of law and economics. Before discussing the results of economic analysis, the legal background and some non-economic theories of duress are briefly presented.
Promoting Public-Regarding Legislation Through Statutory Interpretation: An Interest Group Model
We live in a time of widespread dissatisfaction with the legislative outcomes generated by the political process.' Too often the process seems to serve only the purely private interests of special interest groups at the expense of the broader public interests it was ostensibly designed to serve. While the current distrust of government represents a major shift away from the dominant public perception of "government as helper ' 2 that existed from the time of the New Deal until the present decade, the current attitude is not new by any means. As Professor Sunstein has observed, "[t]he problem of faction has been a central concern of constitutional law and theory since the time of the American Revolution." In fact, a basic justification offered by the framers for their new Constitution centered around its usefulness in controlling interest groups.4 Academics, however, have only recently applied the tools of