Abstract:
In Wrap Contracts, Nancy Kim offers both a withering critique of contracting practices in the digital world and a blunt indictment of US courts’ failure to rein those practices in. In the book’s final chapter, Kim makes a series of bold proposals for doctrinal reform. Perhaps the most radical of these is her proposal to fundamentally change the structure of the unconscionability defense in the case of wrap contracts. Kim would do away with the dual requirements of substantive and procedural unconscionability in favor of a more ‘holistic’ approach in which — in a dramatic reversal of current doctrine — the party wishing to enforce a wrap contract would have the burden of proving the contract ‘conscionable’. Under Kim’s proposal, this burden could be carried in only two circumstances: where the term at issue is expressly permitted by existing legislation or where an alternative term was available to the party seeking to avoid enforcement.
In this very short essay, I explain why I find Kim’s diagnosis of the problem with unconscionability doctrine persuasive, but her proposed solution wanting in important respects. Reacting to courts’ willingness to enforce one-sided terms in wrap contracts provided bare procedural requirements have been satisfied, Kim proposes to eliminate unconscionability’s substantive prong altogether, while tightening its procedural one. In my view, this represents something of an overcorrection, one which may ultimately make it easier for firms to insulate one-sided terms from being invalidated by courts. If the backstop of judicial review of the substance of wrap contract terms has become unacceptably porous, it seems that at least part of the solution should be to fill the pores, rather than simply remove the backstop.
Waisman, Dov A, Preserving Substantive Unconscionability (March 19, 2015). Southwestern Law Review, forthcoming.
First posted 2015-03-23 08:02:51
Leave a Reply