Skip to main content
Unpublished Paper
Dysfunctional Contracts and the Laws and Practices That Enable Them: An Empirical Analysis
ExpressO (2012)
  • Debra P. Stark
  • Jessica M Choplin, DePaul University
The main function of entering into a contract is for both parties to be bound through being exposed to negative consequences if they breach. A review of purchase agreement forms used by condominium developers in Chicago, Illinois discovered that 79% eliminate the negative consequences for sellers by providing for highly one-sided remedies wherein the buyer’s sole remedy in the event of the seller’s breach was the return of the buyer’s own earnest money while reserving significant remedies to the developer in the event of the buyer’s default. Courts in many jurisdictions have refused to strike down this type of limitation of liability under an unconscionability standard due to the “clear” wording of these “bargained for” clauses. This article explores how “clear” these clauses really are by reporting the results of an experiment that investigated how well laypeople comprehend these clauses. The results of this experiment reflected a significant percentage of laypersons failing to understand how these clauses attempt to eliminate remedies they would otherwise have. We argue that the results from the empirical studies reported and reviewed here undercut the premise behind applying the difficult to meet “unconscionability” test in determining the enforceability of these limitation of remedy clauses and also provides the evidence of public harm when home purchasers are not represented by an attorney that previous empirical studies have failed to demonstrate. The article details four proposed legal reforms to address these problems.
  • limitation of remedies clauses,
  • unconscionability,
  • unauthorized practice of law,
  • home purchase contract,
  • empirical study
Publication Date
August 18, 2012
Citation Information
Debra P. Stark and Jessica M Choplin. "Dysfunctional Contracts and the Laws and Practices That Enable Them: An Empirical Analysis" ExpressO (2012)
Available at: