Michael Giberson
[This post is first of two on Eisenberg’s essay on unconscionability. Link to part two.]
Use of vague concepts like “unconscionability” in price gouging laws creates problems. Businesses are not always sure what prices are legal under such laws, and as a result may price products uneconomically low or remove products from the market altogether rather than risk prosecution. Prosecutors gain flexibility from the vagueness, but then bear the burden of convincing a judge or jury that a particular price was in fact unconscionable. In some cases states provide explicit guidance – maybe 10 percent, 15 percent, or even 25 percent over pre-emergency prices – but often states simply prohibit “unconscionable,” “excessive,” or “exorbitant” prices without providing further guidance.
Melvin Eisenberg has an essay on unconscionability in contract law that helps explain that term and may prove useful in understanding price gouging law (link in continuation). As it turns out, Eisenberg does offer some concepts useful to thinking about price gouging, but when he actually addresses price gouging directly his analysis neglects these concepts. In a subsequent post I’ll discuss Eisenberg’s price gouging analysis, the remainder of this post looks at the general idea of unconscionability.
