Consumer Law

Ben-Shahar on the Opportunity to Read Contracts

By Jeff Sovern

Omri Ben-Shahar  of Chicago has written The Myth of the 'Opportunity to Read' in Contract Law.  Here's the abstract:

Standard form contracts in consumer transactions are usually not read by consumers. This "unreadness" of contracts creates opportunities for drafters to engage in unfair trade practices. Various doctrines of contracts and consumer protection law address this concern. One of the prominent solutions coming out of recent proposals for reform is to give individuals a more substantial opportunity to read the contract before manifesting assent. With the greater opportunity to read, more transactors will actually read the terms and assent to the boilerplate will be more "robust." This Essay argues that solutions that focus on providing consumers an opportunity to read are useless, and can potentially be harmful. Most likely, greater opportunity to read would not produce greater readership of contracts - not the type that can help people make informed decisions - and the purpose of this solution would not be achieved, and could have unintended consequences. Even if the compliance with the requirement of opportunity-to-read is fairly cheap (e.g., giving consumers access to the boilerplate in advance), making this a central feature of the legal regulation of standard form contracts makes little sense. The paper ends by proposing non-legal approaches to making the contract terms more transparent, by building on market devices such as ratings and labeling.

Full post as published by CL&P Blog on February 03, 2009 (boomark / email).