Ethics of contract pricing

This study explores the legal and ethical issues associated with contract pricing. In particular, it focuses on a set of legal precedents which have addressed the enforceability of allegedly unfair contract prices. Traditionally, the common law has emphasized the consent of the parties. If the parties consented to a given price; it is presumptively fair and enforceable. The cases reviewed in this study, however, seem to draw upon alternative moral conceptions of fairness not normally associated with the common law. The analysis begins by distinguishing the traditional legal conception of fairness from alternative moral conceptions. The cases are then read with a critical eye so as to tease out the underlying principles which best explain them. The analysis illustrates that, notwithstanding judicial rhetoric to the contrary, the courts continue to employ the traditional legal notion of fairness, to the exclusion of alternative moral concerns. The study clarifies an otherwise murky area of the law and illustrates that the legal meaning of fairness differs greatly from the moral one.Daniel T. Ostas is an Assistant Professor at the College of Business and Management, University of Maryland. He holds both a J.D. and a Ph.D. A member of the Indiana Bar since 1980, Dr. Ostas has published several articles on real estate and antitrust law. This present paper derives, in part, from his dissertation entitledEconomic Logic of Unconscionability Adjudication.