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Abstract:
The Internet is turning the process of contracting on its head. With increasing alacrity, people are mouse-clicking their way into enforceable standard-form contracts on the Internet ("browsewrap" contracts) while installing software ("clickwrap" contracts). The emergence of this new contracting medium has produced numerous claims of the inadequacy of existing contract law to govern standard-form contracts made at the speed of light. Consumer advocates worry that the electronic media presents new methods for businesses to take advantage of consumers. By contrast, businesses engaged in e-commerce insist that courts must relax existing legal protections so as to nourish this new form of business. We contend that existing contract law provides an appropriate regime in which to assess electronic contracts.

We support our conclusion by reviewing the underlying factors that shape the law of standard-form contracting in the paper world and by determining whether the new dynamics of e-commerce create a fundamentally different environment. In the paper world, business use of standard forms creates efficiencies and saves costs for both businesses and consumers, but it also can lead to business' exploitation of consumers. We assess the rational, social, and cognitive factors, as well as other business practices, that affect consumers' abilities to protect themselves from exploitation. We conclude that the current judicial approach appropriately presumes consumer assent to negotiated terms and, so long as the consumer has had a reasonable opportunity to read the standard terms, to conscionable standard terms. Courts also properly remain vigilant in policing unreasonable boilerplate.

A switch to electronic commerce does not change this analysis. To be sure, the electronic environment has provided consumers with new research tools, thereby suggesting that rational consumers will be better able to protect themselves, and the electronic environment has eliminated the social pressures that businesses can use to induce consumers to enter into exploitationist contractual terms. However, the new electronic environment has not changed the overly optimistic manner in which consumers think about these contracts, namely that nothing will go wrong and that boilerplate terms do not matter. In addition, the electronic environment has created new opportunities to exploit consumers. We therefore assert that courts should adopt a strategy similar to their approach in the paper world. Courts should presume the enforceability of both browsewrap and shrinkwrap contracts, but should also focus on the potential for procedural and substantive exploitation by businesses.

Contracts, Cyberspace

Abstract:
In a recent article, Standard-Form Contracting in the Electronic Age, 77 N.Y.U. L. Rev. 429 (2002), Jeffery Rachlinski and I analyzed whether contract law's approach to the problem of paper standard forms can effectively govern electronic forms. We thought the rational and cognitive reasons consumers fail to read their paper forms apply in the e-environment. Further, although e-consumers do not face manipulative sales agents or impatient customers waiting in line but, instead, largely contract at home in the evening without time constraints, e-consumers are impatient, even click happy, and therefore still do not read their forms or shop for the best terms. Relying on these assumptions about how consumers treat their e-standard forms and evidence concerning how e-businesses use the Internet, we concluded that Internet contracting is not fundamentally different from the paper world. Accordingly, major changes in the approach of contract law are not imperative.

This paper tests our assumptions about consumer behavior when agreeing to e-standard forms by offering some empirical evidence of consumer practices. I report on a survey of 92 contracts students' e-standard form practices. The survey inquired about all aspects of their practices, including frequency of contracting, the place and time of such contracting, whether they read their e-forms or shop for terms, the reasons for reading or failing to read, and the factors that would promote reading.

Although the survey results reinforce our assumption that consumers generally do not read their e-standard forms, the truth is a bit more complicated. A large majority of respondents purchase at night and at home. Nevertheless, few respondents read their e-standard forms beyond price and description of the goods or services "as a general matter." Further, beyond price and description, a large minority of respondents do not read their forms at all. However, more than a third of the respondents read their forms when the value of the contract is high and more than a third read when the vendor is unknown. Further, a small cadre of respondents read particular terms beyond price and description, primarily warranties and product information warnings. On the other hand, virtually no respondents read choice of law/forum or arbitration clauses.

The survey also reveals that impatience accounts most often for the failure of respondents to read their forms. Not surprisingly, respondents rarely shop for advantageous terms, despite the greater availability of terms on the Internet.

The paper concludes by analyzing possible legal responses to e-standard form contracting in light of the survey results.

Abstract:
This article analyzes whether mandatory website disclosure of e-standard terms, advocated by some as a potential solution to market failures when consumers contract over the Internet, potentially may backfire. By mandatory website disclosure, I do not mean a clickwrap presentation of terms, in which a consumer must click I agree or the like on a screen presenting the terms prior to the completion of a transaction in progress. Mandatory website disclosure would require a business to maintain an Internet presence and to post its terms prior to any particular transaction.

The problem is not that website disclosure would increase the cost of doing business, which would be passed on to consumers in the form of higher prices. Businesses have been unable to demonstrate that displaying their terms on their websites would be costly. Nor should drafting rules that implement the law be too difficult. Businesses could be required to display their terms on their homepage or on another page reachable directly through a clearly identified hyperlink. Further, businesses could be required to prove the availability of their terms by furnishing relatively inexpensive archival records of their websites. Website disclosure may backfire, however, because it may not increase reading or shopping for terms or motivate businesses to draft reasonable ones but, instead, may make heretofore suspect terms more likely enforceable.

Abstract:
This article is a revised version of a paper delivered at the 33rd Annual Workshop on Commercial and Consumer law, held at the Faculty of Law of the University of Toronto. It is a commentary on Stephen Waddams, Dimensions of Private Law: Categories and Concepts in Anglo-American Legal Reasoning (Cambridge, Press 2003). The article first reviews Waddams' thesis of the inadequacy of simple explanations or categorizations of private law and Waddams' admonition to avoid labeling cases such as contract or tort, as if one involves solely enforcing agreements and the other only wrongdoing. The article then goes on to analyze questions inspired by Waddams' book: What accounts for the popularity of conceptualizing private law? What are the ramifications of the reality that private law is complex and multidimensional? What new approaches to the study of decision-making shed light on the judicial process when judges confront multidimensional problems? The article concludes that analysts should not be sanguine about the ability of judges to handle complexity and that judges make systematic errors in that environment just like everyone else. If categorizing or mapping moves only a few prominent concepts to the forefront, perhaps it performs an important service.

Abstract:
This paper reports on software-licensor express warranty and disclaimer practices on the Internet. Our data show that virtually all of the websites and End User License Agreements (EULAs) we sampled include express warranties on the website and disclaimers of the warranties in the EULAs that may erase all or much of the quality protection. Next, the paper reviews the reasons why consumers generally do not read their e-standard forms despite the prevalence of disclaimers and other adverse terms. We then argue that e-commerce exacerbates the problem of warranties and disclaimers and that lawmakers should address this issue. We contend that improved disclosure of disclaimers, including making them easily accessible on a website prior to any particular transaction and possibly even the subject of a pop-up window during a transaction, is the best of various imperfect solutions to the problem. Disclosure is inexpensive and, at minimum, creates the potential for more legitimate consumer assent to e-standard forms, including assent to disclaimers of warranty. Even if in the short term consumers do not read their forms, perhaps consumers will eventually learn of misleading warranties and disclaimers because the Internet creates communication possibilities and research tools unavailable to disgruntled purchasers in the paper world. The prospect of the word getting out that a licensor does not intend to stand behind its promises and representations may be sufficient to curtail the practice of misleading warranties and disclaimers.

express warranty, disclaimer, EULA, standard form, disclosure

Abstract:
Our fast-paced age of electronic agreements that ostensibly govern transactions as diverse as downloading software, ordering goods, and engaging in collaborative development projects raises questions regarding the suitability of contract law as the appropriate legal framework. While this question arises in many settings, we focus here on the free and open source software (FOSS) movement because of the maturity and success of its model and the ubiquity of its software. We explore in particular whether open source licenses are supported by consideration, and argue that they are, and that open source licenses are contracts. We further argue that a contractual framework working in tandem with the intellectual property laws is the appropriate legal structure to govern FOSS transactions. Our discussion holds implications for the understanding of consideration doctrine and contract law generally outside of the FOSS example and, indeed, for collaborative development and electronic agreements generally. The article is thus an exercise in understanding consideration doctrine's past and future.

contract, consideration, copyright, open source

Abstract:
There are many ways to define a legal calamity. For example, a grossly unfair or inefficient law constitutes a legal calamity. A law that produces serious and deleterious unintended effects, such as effects opposite from those intended, is another kind of legal calamity. A law that is so imprecise and confusing that judges do not know how to apply it and lawyers do not know how to advise their clients is still another example of a legal calamity, which I focus on in this paper. Because this paper is a contribution to a symposium on commercial legal calamities, my example is Uniform Commercial Code (UCC) section 2-209, dealing with contract modification and waiver. But my goal is not to explain why 2-209 is a calamity of the third kind - everybody already knows that it is. I use the section to illustrate the kind of strategy of lawmaking that cannot fail to create a calamity of obfuscation. Section 2-209 illustrates what happens when lawmakers who boldly seek to reform the law cannot bring themselves to carry out their plan or never fully understand the ramifications of what they are doing. Instead, they waiver. The result is chaos - a commercial calamity.

Abstract:
In a symposium to honor Professor Richard Speidel, a giant in the field of contract and commercial law for over four decades, this contribution argues that Speidel may have been correct in asserting that, in limited circumstances, court adjustment of disrupted long-term contracts makes sense. I assert that nothing courts have decided or writers have analyzed since the ALCOA case proves that court adjustment is wrong-headed. But, as with so many policy issues, we may never identify the "best" judicial approach to disrupted long-term contracts because resolution depends on too many variables and unknowns.

contracts, commercial law, law and courts

Abstract:
"Rolling contracts" are one method of presenting standard forms to contracting parties, including consumers, who are the focus of this paper. In a rolling contract, a purchaser orders goods and pays for them before seeing most of the terms, which come later in or on the packaging of the goods. The purchaser can return the goods for a limited time period.

This paper addresses the controversy over whether the new terms are part of the contract and enforceable against the purchaser. Although most analysts focus on when the contract is formed, this paper urges that this analysis yields little fruit. In fact, it is rather curious why analysts believe so much should turn on the question of whether the seller makes the terms available before or after contract formation when these writers also believe that purchasers do not read their forms either way. Instead, courts should focus on whether the new terms are conscionable. Because sending terms with the goods is not uncommon, and similar to many other terms-after-payment transactions, and because the purchaser has the opportunity to return the goods if the terms are undesirable, rolling contracts rarely should be procedurally unconscionable. On the other hand, courts should carefully peruse the terms to police them for substantive unconscionability.

Rolling contracts, unconscionability, standard forms, standard terms

Abstract:
The article investigates why contracts lawyers, judges, and theorists ("contracts people") routinely and confidently invoke "traditional beliefs" about contract law that are not even close to true. For example, contracts people often declare that the purpose of expectancy damages is to put the injured party in as good a position as if the contract had been peformed. But expectancy damages vitually never do this. Contracts people also recite that the reasons for breach, whether willful, negligent or unavoidable, do not matter, and that formation and interpretation issues focus on the parties' intentions. Neither of these assertions is close to true either. The goal of the article is to understand why this "contract lore" exists and its ramifications.

expectancy damages, reasons for breach, contract interpretation, legal fiction

Abstract:
This article focuses on claims of legal backfire. Such a claim constitutes the position that a law produces or will produce results directly contrary to one or more of those intended. For example, critics of hate crime legislation claim that the laws increase prejudice instead of diminishing it. The Endangered Species Act, some analysts assert, leads to the destruction of species lawmakers sought to protect. Corporate average fuel economy standards for automobiles have increased the U.S's dependence on foreign oil instead of decreasing it. This article asserts that such claims are pervasive, yet potentially misleading and possibly harmful. Legal backfires are often a rhetorical strategy for opposing the promulgation of new law or policy or for attempting to have existing law rolled back. The article also addresses a more basic problem: the challenges to effective lawmaking and the limitations of techniques to evaluate the effects of law make an accurate assessment of law problematic. The article concludes that lawmakers should proceed with caution when dealing with legal backfire claims, because critics of laws almost invariably author these claims, the claims are rhetorically charged, and the claims are extraordinary.

Endangered species act, hate crime laws, fairness doctrine, CAFE standards

Abstract:
Discontent with the apparent tunnel vision of economic analysis of law's rational choice theory, legal scholars recently have turned with enthusiasm to "behavioral decision theory" (BDT) to enrich their understanding of how people make decisions and of the law's effect on human behavior. This article, for the first time, evaluates BDT's potential contribution to legal analysis by focusing on a single, important legal paradox: Despite contract law's freedom of contract paradigm, courts actively and enthusiastically police agreed damages provisions. Although the article finds an important place in legal analysis for this new discipline, the article raises and discusses several obstacles to BDT's effectiveness.

Abstract:
Although the theory of promissory estoppel enforces promises that induce reasonable detrimental reliance, this article reveals the theory's colossal failure in the non-union employment setting. This conclusion is based on an examination of all of the reported decisions in the United States that discussed promissory estoppel over a two-year period in the mid 1990's. During this period, employees won only 4.23 percent of employment promissory estoppel cases decided on the merits. At first blush, this is very surprising because employers, through their communications, seek to create the expectation of a stable, secure work environment and employees, because of their lack of job security and material and psychological investments in their jobs, often rely on these messages.

The article sets forth and explains several reasons for the failure of promissory estoppel in employment cases. First, many employees' promissory estoppel claims appear to constitute secondary theories tacked on to lawsuits that focus on other theories. Second, in the 1990's, employees (and their lawyers) have failed to detect an increasing judicial preference for written contracts as the principal basis for promise enforcement. Third, compounding the effect of this shift in judicial strategy, courts appear especially reluctant to grant employee promissory estoppel claims in the shadow of the at-will employment rule. As a result of the latter two factors, courts may have been too quick to dismiss a substantial number of meritorious promissory estoppel claims. Promissory estoppel therefore has failed to fulfill its promise to afford non-union employees greater legal protection in the workplace.