I argue that under a wide range of conditions it will be difficult for the state to justify non-enforcement of contracts on grounds of unconscionability without making itself vulnerable either to the charge of paternalism or the charge of hypocrisy. On the one hand, the state might take the view that there is something morally wrong with the agreement because it didn’t make sense for the weaker party to enter into it in the first place. But this kind of justification seems to be premised upon a paternalistic judgment about the weaker party’s rational capacities. On the other hand, the state might take the view that although the agreement was entered into freely and rationally by both parties, it nonetheless involves a morally problematic form of exploitation, because the stronger party has secured terms that take unfair advantage of the impoverished circumstances of the weaker party. But then it is difficult to see what could be morally wrong with the contract unless the conditions under which it was made were unjust. And if the injustice of the initial conditions contributes to the state’s view that the agreement is morally problematic, then it will often be awkward for the state to invoke these moral problems to justify non-enforcement of the agreement, because the state will usually be deeply implicated in creating and preserving those unjust conditions of contract. The state’s justification thus makes it vulnerable to the charge of hypocrisy: it appears to be subjecting contracting parties to a kind of critical scrutiny to which it does not subject its own actions.
I consider two ways in which a defender of the unconscionability doctrine might respond to the hypocrisy charge. First, he might attempt to diffuse the objection by rejecting the key premise that drives it — that the state is in fact subjecting contracting parties to a form of critical scrutiny to which it does not subject its own actions. He might do so by arguing that the state has good reasons to preserve background injustices at least in the short-run. Second, he might deny that hypocrisy has any bearing on permissibility in this context. If this objection succeeds, then the state can continue to decline to enforce exploitative contracts notwithstanding the charge of hypocrisy. I argue that the diffusion strategy succeeds in some but not all circumstances, while the second objection fails in general because the state has a pro tanto reason not to act hypocritically.
Stone, Rebecca, Unconscionability, Exploitation, and Hypocrisy (March 21, 2013). Journal of Political Philosophy, Forthcoming.