It takes a bold spirit to tussle with the formidable 7th Circuit judge Richard Posner, whose views SBM Blog regularly flags, but Theresa Amato, a lawyer The Nation describes as a "fair contract activist," is game. Amato says courts wrongly condone unconscionable contracts, and points to Posner as one example. From The Nation's story:
Again and again, judges admit that there’s some kind of problem—the legendary Chicago federal judge and author Richard Posner admitted he hadn’t read the fine print when he signed his own mortgage—but claim their hands are tied, and sign off on the contracts nonetheless. Amato points to a Florida appeals court opinion, not yet finalized, in which the family of an elderly woman, now deceased, felt ripped off by her nursing home and challenged the legitimacy of the fine-print contract she had signed. I read the opinion. Acknowledged the judge, “At the time, she was 92 years old and had a fourth-grade education. She could not spell well and often had to sound out words while reading. She had memory problems and was increasingly confused.” He said, “As a practical matter, a significant percentage of the people who enter nursing homes and rehabilitation centers have mental or physical limitations that make it difficult for them to understand the agreements. The same is probably true for most of the contracts that we sign for many consumer services.”
This judge continued on to make a general theoretical point: “There was a time when most contracts were individually negotiated and handwritten. In that period, perhaps the law could adequately describe a mutual agreement as a ‘meeting of the minds’ between the parties”; but not any more.
When I read that, I nodded my head. I thought he was making a sympathetic point, the same one Amato has been pressing home to me: that when our entire system of consumer commerce is based on a vast, structural imbalance of power between sellers empowered to dictate terms, and buyers all but helpless to do anything but accept them just to participate in the economy, something is badly broken—in fact, the free market, which any right-wing economist says relies on adequate information to function efficiently, is badly broken. Even though I knew how this story ended—a decision unfavorable to the family of the deceased—I figured he at least was making one of those “regrettably, my hands are tied” points.
He wasn’t. He was saying the opposite: that there was no problem with inscrutable contracts at all. “Our modern economy,” he concluded, “simply could not function if a ‘meeting of the minds’ required individualized understanding of all aspects of the typical standardized contract that is now signed without any expectation that the terms will actually be negotiated between the parties.”