ABSTRACT
This article proposes that the American unconscionability doctrine replace or complement the Ecuadorian gross disparity doctrine (lesidn enorme), a change that requires reformation of Ecuador’s Civil Code. To understand this proposal, this article uses a comparative analysis of both doctrines, arguing that even though the United States’ unconscionability doctrine and the Ecuadorian gross disparity doctrine in contracts law have many similarities, their differences must be acknowledged when executing international business transactions between each country’s parties. Failure to do so may result in serious consequences that could damage one, or both, of the parties. From the outset, these doctrines share the same general rule known as pacta sunt servanda – that agreements must be kept – and satisfy all legal requirements of contract formation if scrutinized by courts. Nevertheless, they differ in their scope, the way they understand the fair market value, and the standard applied to obtain a remedy. These operational differences distinguish each doctrine in practice.
This article seeks to outline the best outcome for the parties under each doctrine, outside of any theoretical reference. To do so, this article will show how both doctrines function when applied to the same three cases: two from the United States, and one from Ecuador. Drawing from these examples, this article will ultimately conclude that a reform to the Ecuadorian Civil Code’s gross disparity doctrine standard must be made: a strong change that will fully protect contracting parties who suffer damages but who do not fit the rigid standards of the gross disparity doctrine.
Delgado Del Hierro and David Francisco, The Unconscionability Doctrine Versus The Gross Disparity Doctrine (February 10, 2022), Willamette Law Review.
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