Seller Unequal Bargaining Power and the Judicial Process

Abstract

In the last two decades, courts have used the concept of unequal bargaining power to strike down a variety of seller practices. A federal district court in California declared unconstitutional § 9-503 of the Uniform Commercial Code, which permits secured creditors to repossess without a judicial hearing, because the Code's jurisdiction was "not limited to secured transactions between parties of equal bargaining power." More recently, the Supreme Court declared the replevin statutes of Florida and Pennsylvania unconstitutional, because they also allowed repossessions without judicial hearings. To the claim that the buyers in those cases had waived their rights to such hearings, the Court replied: "There was no bargaining over contractual terms between the parties who, in any event, were far from equal in bargaining power." And several years ago, in a celebrated and often followed opinion, the New Jersey Supreme Court declared the warranty clauses accompanying the sale of new cars unconscionable partly because of the "gross inequality of bargaining position occupied by the consumer in the automobile industry."