Table of Contents

A Eulogy for the EULA

Miriam A. Cherry, Saint Louis University - School of Law

Avoiding the Next Global Financial Crisis: A Canadian Perspective, Focusing on the 'Boundedly Rational Consumer'

Derek Ireland, Carleton University
Kernaghan Webb, Ryerson University - Law & Bus. Dept, Ted Rogers School of Management & Director, Institute for the Study of CSR

Consent and Sensibility: A Review of Margaret Jane Radin's Book, 'Boilerplate: The Fine Print, Vanishing Rights, and the Rule of Law'

Michelle Boardman, George Mason University School of Law

Credit Markets and Economic Activity: Evidence from Exogenous Variation in Legal Institutions

James R. Brown, Iowa State University - Department of Finance
J. Anthony Cookson, University of Colorado at Boulder - Leeds School of Business
Rawley Heimer, Brandeis University - International Business School


CONSUMER LAW eJOURNAL

"A Eulogy for the EULA" Free Download
Duquesne University Law Review, Forthcoming

MIRIAM A. CHERRY, Saint Louis University - School of Law
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Participants in the Duquesne University Law Review were asked to write about the future of contract law, specifically contract law in 2025. My contribution is a short science fiction story that is set in 2025. Sometimes, conflicting terms in a contract can give you a headache... or a brilliant idea? Expect both the utopian and dystopian from this story, along with contract law theory.

"Avoiding the Next Global Financial Crisis: A Canadian Perspective, Focusing on the 'Boundedly Rational Consumer'" Free Download

DEREK IRELAND, Carleton University
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KERNAGHAN WEBB, Ryerson University - Law & Bus. Dept, Ted Rogers School of Management & Director, Institute for the Study of CSR
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The collapse of the American subprime mortgage market and the global financial crisis and recession essentially came to an end in 2009 and yet these events continue to haunt the global economy. They raise difficult to answer challenges and questions regarding whether enough has been done to prevent another global financial crisis in the near to medium term future, to compensate for the substantial harm incurred by consumers, smaller businesses and other market participants, and to re-instill confidence in the global financial regulatory system.

The major argument of this paper is that changes in national and global financial sector markets and regulatory regimes since the collapse of the American subprime mortgage market and global financial crisis provide the boundedly rational but willing to learn financial consumer with somewhat better protection. However, these changes by themselves are not sufficient to prevent another regulatory debacle that would cause as much or even more harm to the financial consumer in the future – including in countries like Canada and Australia that were less affected by the last calamity.

The monetary and psychic payoffs from gaming the financial regulatory system are still too attractive, and the culture of high risk, reckless, irresponsible, myopic, and pushing the envelope conduct is too entrenched, to respond to traditional top-down laws, regulations and enforcement practices of governments and their financial regulatory authorities. Moreover, the further globalization of financial markets; the growing complexity of financial products, transactions and contracts; and the integration of emerging market economies into global financial markets; pose new and unfamiliar dangers to national and international financial markets and financial consumers. These trends suggest that countries like Canada and Australia that were less influenced by the 2007 crisis may be less fortunate in the future.

The paper’s major conclusion is that the likelihood of another financial crisis of similar magnitude can be diminished if there is concerted systematic action under a sustainable governance mode which involves inter-governmental and governmental bodies, the private sector, civil society, and individual consumers. Each actor has unique capabilities and energies. In some respects, the polycentric and distributed governance approach proposed here involves enhanced collaboration among all actors. In others, it involves recognition of the need for enhanced mechanisms to provide “checks and balances? on the powers and capabilities of any one actor or instrument.

Harnessing the insights, capabilities and energies of all actors, including those of the financial consumer, will better ensure that: (i) the corporate culture of gaming the regulatory system will be reduced, (ii) the global contagion that characterized the last financial crisis will be mitigated and stopped at more national borders, and (iii) over time the current too big to fail approach to large international banks and other financial service providers will be recognized as unnecessary and a false hypothesis.

This approach is referred to in this paper as “sustainable governance? because of our conclusion that both top-down and more organic bottom-up approaches will be needed, given the complexity and magnitude of the governance task. We recommend that more research should be focused on the self-actualization governance capabilities of individual consumers to protect themselves, and on the ability of civil society organizations to provide independent research, consumer information, “checks and balances? oversight functions, and strong advocacy on behalf of consumers. These two aspects appear to be under-studied in the financial reform research and literature conducted to date.

"Consent and Sensibility: A Review of Margaret Jane Radin's Book, 'Boilerplate: The Fine Print, Vanishing Rights, and the Rule of Law'" Free Download
Harvard Law Review, Vol. 127, No. 7, p. 1967, 2014

MICHELLE BOARDMAN, George Mason University School of Law
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In this book, Professor Margaret Radin offers a fresh look at the fit between boilerplate contracts and our notions of consent. She also builds a case against allowing certain contract terms to create a "rights deletion scheme" aimed at shrinking access to legal redress.

This review explores both rich lines of analysis but concludes they need not intertwine. Radin's argument is crafted in the language of consent; I argue that her proposed resolution concerns not consent but welfare. To the extent the widespread use of redress clauses leads to a collective harm, the issue is not one of individual consent. If the rights at hand are basically inalienable, as Radin holds, the problem is not that one does not consent but that one is permitted to do so; improving the quality of individual consent will not address the harm.

Taking Radinian consent on its own merits, the review also explores how Radin confronts the challenge of presenting a conception of consent that delegitimizes boilerplate without delegitimizing "ordinary" contractual consent. I compare Radin's approach with other conceptions of consumer consent and offer the possibility of consenting to a continuum of options, where the consumer agrees to a deal ignorant of a specific term but aware of the possible range of terms.

"Credit Markets and Economic Activity: Evidence from Exogenous Variation in Legal Institutions" Free Download

JAMES R. BROWN, Iowa State University - Department of Finance
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J. ANTHONY COOKSON, University of Colorado at Boulder - Leeds School of Business
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RAWLEY HEIMER, Brandeis University - International Business School
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This paper uses a novel dataset on consumer credit together with quasi-experimental variation in legal institutions on American Indian reservations to study the causal link between credit markets and economic activity. Using detailed individual-level measures of credit supply from the Equifax Consumer Credit Panel, we find that reservations where the court system is better understood by lenders have more robust credit markets. Using quasi-experimental variation in legal institutions’ effect on credit, we explore the link between credit and economic activity more generally. Specifically, we find that per capita personal income and proprietor income are greater when reservation credit markets are more robust due to differences in legal enforcement, and that this effect is greater among industries that are more dependent on external financing. A principal advantage of our setting relative to cross-national studies comes from the use of exogenous variation in legal institutions across relatively-similar American Indian reservations. We believe our findings, data, and sources of variation provide the most credible link between institutions, credit and real economic activity to date.

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About this eJournal

This eJournal distributes working and accepted paper abstracts of articles, recently published articles, books, legislative reports, conferences, and other publications that address issues of interest to consumer law scholars and practitioners. Coverage includes legal issues pertaining to advertising, consumer reporting (including credit repair organizations), discrimination (including redlining), consumer disclosure (such as the Truth in Lending Act, the Real Estate Settlement Procedures Act, and consumer leasing), consumer fraud (including issues arising under the Federal Trade Commission Act, state UDAP statutes, odometer laws, referral sales, and bait and switch statutes), unconscionability, standard form contracts, consumer privacy (including telemarketing, spam, spyware, phishing, direct mail, financial privacy, common law privacy torts in consumer transactions, and online privacy), identity theft, data protection, cooling off rules (including door to door sales regulation), payment systems (such as credit and debit cards, internet payment issues, stored value cards (including gift cards and phone cards), and electronic transfers), warranties (including UCC warranties, lemon laws, and the Magnuson-Moss Warranty Act), consumer product safety, commercial speech doctrine, debt collection, repossession, predatory lending (including asset-based lending, equity stripping, flipping, balloon payments, negative amortization, loan packing, rate-risk disparities and yield-spread premiums), payday lending, usury, credit insurance, electronic shopping (including electronic signatures and records, formation of contracts, and payments), the holder in due course regulation, mortgages, student loans, repossession, foreclosure, regulation that pertains to consumer markets and enforcement of consumer laws (including class actions, preemption, arbitration, administrative enforcement, small claims courts and attorney's fees). The eJournal does not cover landlord-tenant issues or criminal law. The eJournalwelcomes a broad range of methodological approaches, including conventional doctrinal analyses, law and economics approaches, historical discussions, socio-legal analyses, law and society approaches, discussions of consumer psychology that bear on legal issues, international law analyses and comparative law approaches.

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Advisory Board

Consumer Law eJournal

RICHARD M. ALDERMAN
Associate Dean, Director - Consumer Law Center, Dwight Olds Chair in Law, University of Houston Law Center

JEAN BRAUCHER
Roger Henderson Professor of Law, University of Arizona - James E. Rogers College of Law

MARK ELLIOTT BUDNITZ
Professor of Law, Georgia State University College of Law

MICHAEL M. GREENFIELD
George Alexander Madill Professor of Contracts and Commercial Law, Washington University in Saint Louis - School of Law

ALVIN C. HARRELL
Professor of Law, Oklahoma City University - School of Law

CREOLA JOHNSON
Professor of Law, Ohio State University - Michael E. Moritz College of Law

DEE PRIDGEN
Associate Dean and Professor of Law, University of Wyoming College of Law

IAIN D. C. RAMSAY
Professor of Law, University of Kent, Canterbury - Kent Law School

RALPH J. ROHNER
Professor of Law, Catholic University of America - Columbus School of Law

NORMAN I. SILBER
Associate Dean for Intellectual Life and Professor of Law, Hofstra University School of Law