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http://ssrn.com/abstract=1443908
 
 

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The Law of Standard Form Contracts: Misguided Intuitions and Suggestions for Reconstruction


Shmuel I. Becher


College of Management

Esther Unger-Aviram


Sapir Academic College

August 4, 2009

DePaul Business & Commercial Law Journal

Abstract:     
The law of standard form contracts rests on intuitions. This essay explores these intuitions and examines intended consumer behavior in common contracting contexts. The first study in this essay focuses on the intent of consumers to read form contracts in four different scenarios. The second examines the extent to which prevalent rational-economic factors influence potential consumers in their intent to read form contracts. Our findings support some of the common assumptions found in the literature and contradict others. The findings from the first questionnaire support the assumption that most consumers do not read most of the contracts in their entirety at the time of contracting. However, they do not support the assumption found in some literature that a substantial minority of consumers read their contracts and thus might discipline sellers. The results also show that many more consumers indicate a tendency to read contracts after the fact. The findings of the second questionnaire show that at the time of contracting, the most prevalent rational-economic reasons for reading the contact are cost, length of contract and the prospects of influencing or changing contract terms. Cost and the chance to influence or change contract terms are also detrimental factors in consumers' intention to read form contracts after the fact, as is the opportunity to learn new things about their rights and obligations under the contract. Quite surprisingly, however, legal jargon, print density and font size are not key factors in consumers' decisions on whether to read their contracts. All these findings can serve policy makers and courts in better designing the law that governs consumer form contracts.

Number of Pages in PDF File: 24

Keywords: consumer contracts, consumer contracting behavior

JEL Classification: K12, K3

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Date posted: August 7, 2009 ; Last revised: April 7, 2010

Suggested Citation

Becher, Shmuel I. and Unger-Aviram, Esther, The Law of Standard Form Contracts: Misguided Intuitions and Suggestions for Reconstruction (August 4, 2009). DePaul Business & Commercial Law Journal. Available at SSRN: http://ssrn.com/abstract=1443908

Contact Information

Shmuel I. Becher
College of Management ( email )
7 Yitzhak Rabin Blvd.
P.O. Box 25072
Rishon LeZion, 75190
Israel
Esther Unger-Aviram (Contact Author)
Sapir Academic College ( email )
Hof Ashkelon
Israel
972-8-6802869 (Phone)
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