Hila Keren, ‘Guilt-Free Markets? Unconscionability, Conscience, and Emotions’

Despite record-level economic inequalities and a vast growth in market exploitation, courts remain surprisingly reluctant to exercise their power to in-validate the resulting predatory contracts. There is no doubt that courts are authorized to invalidate predatory contracts based on their unconscionability. There is, however, an ongoing debate regarding the desirability of utilizing this judicial power in a capitalist society. This Article enters the discussion from a unique angle: it focuses less on the bottom line of jurisprudence and more on the law’s expressive power — the fact that the law’s impact extends beyond its ability to sanction or reward behaviors. Specifically, the Article argues that the way in which courts frame and discuss both market misbehaviors and the harms they cause may have an immense impact on other peoples’ behaviors, a potential that is currently unrecognized. Judicial reviews that reach the public domain have the power to encourage or discourage future wrongful behaviors and, more broadly, to influence the social and ethical norms governing the market.

This Article begins with a fundamental premise that receives far too little consideration in traditional, economic, and even behavioral legal analyses: that emotions play a leading role in shaping moral judgments and altering actions. Considering the impact of law in the domain of the emotions is a key to understanding how unconscionability-based messages may curb exploitative behavior by fostering self-restraint. Drawing on studies in psychology and the neurosciences, the Article first explains how the operation of human con-science depends on two emotions — guilt and empathy. Next, it juxtaposes the discourse of two recent cases, both involving wrongful market behaviors, to demonstrate courts’ ability to either evoke or suppress these emotions. Generalizing those examples, the Article then proposes three viable strategies that courts can use to enhance the operation of the emotions most necessary for self-restraint: a framing that welcomes, rather than ostracizes, the moral emotions; a rhetoric that clarifies the pertinent social norms; and a content that thoughtfully portrays the harm caused to the exploited party.

Notably, the Article’s conclusion is different from existing approaches to unconscionability. Instead of joining those who recommend more or less use of the unconscionability principle by the judiciary, the Article emphasizes the content of judicial decisions. With an understanding of the emotions that shape human behavior, courts can better direct their expressive powers. They can successfully evoke the emotions that facilitate conscience-based self-restraint of market actors. In this way the legal system can help people internalize a norm against market exploitation, thereby fostering a more ethical market environment. Importantly, using the law to support individuals’ conscience may eventually decrease the need for future interventions in the market’s operation.

Keren, Hila, Guilt-Free Markets? Unconscionability, Conscience, and Emotions (February 17, 2015).

First posted 2015-02-21 10:08:52

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