Unconscionability and farmers and psychology of selling

Last Wednesday I gave you the assignment in class to write two paragraphs, one about the situations or people for whom you would have sympathy and one about those which do not evoke sympathy. I asked you to do this assignment because we are studying the doctrine of unconscionability ("U") in sales law. "U's" origin is in equity, which means that it came out of situations where the chancellor would apply princples of justice and fairness to decide a case, rather than rigid legal rules. The equitable roots of U lie behind 2-302. But, as I mentioned in class, U is never defined in the Code. The only hint we get regarding what it might mean is that it has something to do with a "one-sided" contract. This imprecision leaves a lot of leeway for the courts, a lot of opportunities for a concept that is seemingly despised by many in our days: judicial activism. That is, because U is undefined, it will only evolve in its meaning through case law. What is to inform the case law? Certainly a judge's own sense of what is oppressive or what is legitimate. Thus, by having you think about "sympathy," I was trying to coax from you how you would define the doctrine.

I was delighted with your answers, and I would say we could reconstruct about 95% of the modern doctrine of U from your answers. Let me share some of what you said (Ok, I will skip the ones where Ethan and Quentin each expressed lack of sympathy for each other, as well as the [unsigned] statement where one of you said you had no sympathy for Sales Law professors. I interpreted the latter in a complimentary way, actually--that you felt I should be able to "fend for myself" in the sales marketplace...). Some of you told me personal stories about how you had seen people taken advantage of (members of your own family; farmers; single mothers without many resources). Always remember what you have seen of people being taken advantage of--these experiences will probably shape you more significantly than lectures on U.

Those for Whom you DO Have Sympathy

I am distilling your remarks, but the following categories came front and center in most of your answers. About 80-85% of you said you would be more likely to bring an U claim (or have sympathy for such a claim) if the person was uneducated, an immigrant struggling with English or unfamiliar with our customs, the elderly or a person in a desperate situation in life. It is not as if the status of being elderly gives one a per se unconscionability claim, but you were very sensitive to the way that elderly people, who may be lonely or not as aware of their surroundings as previously, are prey for all kinds of unscrupulous people. One of you put it well: "I have sympathy for people who are uneducated and don’t even know how to begin to ask questions regarding a contract." More than one of you mentioned you were sympathetic to college students (even law students) who are badgered by credit card companies and then get behind in their bills, while an equal number of you said you had no sympathy for those who go beyond their credit limits or become deeply indebted through unnecessary purchases. The two situations that seemed to evoke your greatest support were when a person really has no choice but to purchase something at exorbitant terms (the desperate person and necessities of life) or when a person is hounded unmercifully (or skillfully) by salespeople who know, from long experience, how to break down barriers that people might have to purchase things.

Several of you stated that a contract of sale is a very daunting document for lesser educated people. I would add, in my own personal note, that these documents are sometimes difficult for highly educated folk. I spent several hours this weekend trying to work through a contract for purchase of property (not Article 2, however) with my brother. I found myself having to explain a lot of basic contract and property law to him, and he is a Stanford Business School grad. Just for the record...he doesn't think one should have "sympathy" for him. If he misread or partially read the contract, he believes he should live with the consequences.

Situations/People for Whom you DON'T have Sympathy

Several of you, large-hearted young people that you are, found it difficult to say categorically that you wouldn't sympathize with certain situations or actions of people. But, the themes that ran through most of your answers were two: (1) You didn't sympathize with educated people or people who should be informed but choose not to be informed and then, after the fact, try to hire someone to argue U when, in fact, they are just trying to weasel out of their responsibility* and (2) You didn't sympathize with those who

[*Professor Long's friendly "reality check" to students: this will be about 60% of your client base...]

prey on the less fortunate, using their knowledge to take unfair advantaqe of them. More than one of you mentioned how abhorrent to you were various lending practices permitted generally by law today (pay-day loans, title loans, etc.). What your answers here convinced me of was that you now consider yourselves to be in the category of "educated" people, and that you should be responsible to read and know the contents of your rental agreements, purchase contracts, insurance contracts, etc.

Brief Reflection on One Comment

I was touched by a comment made by one of you that relates to what I would call the "psychology" of the buyer-seller relationship. You said: "It sounds funny, but I sometimes find myself in such a position and its difficult to shake these types of sales people, who won't take no...The sales people kind of make you feel like you are being petty or overly cautious. And a lot of people don't know what questions to ask." In other words, sales people/complex contracts can sort of "shame" you into silence. You may not know even what questions to ask or, if you do manage to ask some good questions, you are answered in ways that aren't satisfying to you but you are made to feel "petty or overly cautious" if you keep asking questions. I would say that this is a very true feeling and, if you are feeling it, certainly other less well-informed people are feeling it, too. There is no category in U law for "shame" or "fear of being thought ignorant," but I think if you understand the psychology of selling and buying, that this feeling is never far from people's realities.

Conclusion

We could put the doctrine of U together from your comments. It is when sales people take unfair advantage of someone--usually less educated--by high pressure tactics, unfair bargains, outrageous terms, or fine print. Very few cases allow companies to argue successfully a U claim. Courts (as well as you) were split on whether growers/farmers are vulnerable people. I think the doctrine might "grow" in the area of elder law--which many of you mentioned. Thanks for your contributions. Your thoughts will help you understand the cases better.

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