Cheryl Preston, “‘Please Note: You Have Waived Everything:’ Can Notice Redeem Online Contracts?”

Online consumers are largely unaware of the extent to which their actions are governed by legal terms in the form of clickwraps or browsewraps. These contracts are enforced without any evidence of knowing assent to the terms, but only if the consumer has some notice that a contract exists. The standards for notice are low and consumers routinely click and browse without forming a single thought relative to the legal obligations that arise with online conduct – legal obligations that frequently would not arise with procuring the same goods and services in the real world. Commentators have been hopelessly scrambling to propose various schemes for bringing home to consumers the fact that they are entering enforceable contracts.

This article debunks the idea that notice of the existence of a contract should be the measure of enforceability. The concept of notice relies on the purely fictional notion that a reasonable consumer with notice of legal provisions will stop, read them, understand the terminology, appreciate their legal significance, and decide to proceed or not. The relish for notice is irreconcilable with our knowledge that consumers do not, and cannot, read and comprehend even a fraction of the wrap contracts they encounter. Moreover, the law punishes those few who read because any hope for persuading a court to undertake an unconscionability analysis of a contract is lost to parties who admit to having read the contract. Thus, the law does not offer consumers a reasonable option for making better decisions about legal commitments online. Wrap contracts are merely the means for the powerful drafters to legislate legal results.

This Article contains a review of cases addressing clickwraps and browsewraps in the last decade, which amply illustrates that courts are enforcing them without much, if any, discussion of the length, print, density, or sophistication of the language or the parties, in part, because no one expects consumers to read them. This article then reviews the duty to read rule, and its meager exceptions, as well as the status of the unconscionability doctrine. This analysis supports little hope that courts will begin to police wrap contract excesses. This Article then evaluates various proposals for addressing the problem of wrap contracts and concludes that, while most proposals are some improvement, none hold any significant promise for real change. Finally, this Article concludes with several proposals for reform, including an example of the kind of notice that would be required to give meaning to the theoretical concept that the market will adjust as actors make informed choices.

Preston, Cheryl B, ‘Please Note: You Have Waived Everything:’ Can Notice Redeem Online Contracts? (May 15, 2015). American University Law Review, Vol 65, p 535, 2015.

First posted 2015-05-19 07:17:16

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