Tess Wilkinson‐Ryan, ‘Contracts Without Terms’

In consumer contracting, the ritual of documentation and provision of terms is essentially vestigial, at least as a form of deal-making communication between the parties. This paper starts with a thought experiment: what would it look like to have contracts but no standard terms? Most scholarly and political approaches to the mismatch of contract law and consumer contracting have focused on the information problem in consumer contracting – the difficulty of the required cognitive processing – and thus the proposed solutions have focused on how to make terms more salient or easier to assimilate. I argue that the focus on salience is not only futile but misleading. Promulgating a policy by contract lends it social or moral legitimacy, as well as a presumption of legal legitimacy. I report the results of an experimental questionnaire study designed to assess how the form of a policy – ie, provided in standard terms or available in a non-contractual document, affects consumer behavior when there is a plausible complaint against the drafter. Subjects reported that company policies embedded in contracts were more likely to be legally enforceable, judged those policies as more fair, and reported that they would be less likely to challenge such those policies in court. Furthermore, subjects appeared to grant all but the most clearly non-contractual documents the status of contract, with all of its legal, moral, and social baggage. In the final section of the paper I consider the doctrines of assent and unconscionability in light of these results.

Wilkinson‐Ryan, Tess, Contracts Without Terms (February 24, 2016). U of Penn, Inst for Law and Econ Research Paper No 16-5.

First posted 2016-03-01 07:16:35

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