Competition and the Quality of Standard Form Contracts: The Case of Software License Agreements

30 Pages Posted: 30 Jul 2008 Last revised: 15 May 2014

Date Written: July 29, 2008

Abstract

Standard form contracts are pervasive. Many legal academics believe that they are unfair. Some scholars and some courts have argued that sellers with market power or facing little competitive pressure may impose one-sided standard form terms that limit their obligation to consumers. This paper uses a sample of 647 software license agreements drawn from many distinct segments of the software industry to empirically investigate the relationship between competitive conditions and the quality of standard form contracts. I find little evidence for the concern that firms with market power, as measured by market concentration or firm market share, require consumers to accept particularly one-sided terms; that is, firms in both concentrated and unconcentrated software market segments, and firms with high and low market share, offer similar terms to consumers. The results have implications for the judicial analysis of standard form contract enforceability.

Suggested Citation

Marotta-Wurgler, Florencia, Competition and the Quality of Standard Form Contracts: The Case of Software License Agreements (July 29, 2008). Journal of Empirical Legal Studies, Vol. 5, No. 3, September 2008; NYU Law and Economics Research Paper No. 08-36. Available at SSRN: https://ssrn.com/abstract=1186143

Florencia Marotta-Wurgler (Contact Author)

New York University School of Law ( email )

40 Washington Square South
New York, NY 10012-1099
United States

HOME PAGE: http://its.law.nyu.edu/facultyprofiles/profile.cfm?personID=27875

Register to save articles to
your library

Register

Paper statistics

Downloads
236
Abstract Views
1,581
rank
127,841
PlumX Metrics