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Unconscionability as a Coherent Legal Concept

“Contracts of adhesion” are those long, complicated, boring contracts that no one reads and everyone signs. For a long time, courts enforced them just like they would a regular contract that both parties negotiated. But in the past fifteen years, courts have begun to recognize that contracts of adhesion pose serious problems: because they create obligations that the consumer may be unaware of, these contracts may not actually be increasing social value. Instead, it is possible that the benefits consumers are getting in these contracts are not worth the rights they are giving up.

In stepping in, courts have had to fashion new tools to use. The most common new tool is the doctrine of unconscionability, an old, nebulous doctrine that had been almost indistinguishable from courts’ arguments from public policy. This Comment argues that courts’ use of unconscionability in the context of contracts of adhesion is giving the unconscionability doctrine shape and content, and separating it out from the amorphous arguments from public policy. This new shape requires courts to analyze whether the business (the “offeror”) had reason to know that a reasonable consumer (the “offeree”) would not have read or understood the contract. If the court finds that the business did have reason to know this, then it will not impose on the consumer terms that the consumer would not have expected, or terms that impose costs on third parties.

This new meaning is derived by considering recent state court decisions, as well as by looking at the comprehensive web of contract law doctrines and considering where, and how, a new concept can fit in.