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

DePaul Business & Commercial Law Journal

24 Pages Posted: 7 Aug 2009 Last revised: 7 Apr 2010

Shmuel I. Becher

Victoria University of Wellington

Esther Unger-Aviram

Sapir Academic College

Date Written: August 4, 2009

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.

Keywords: consumer contracts, consumer contracting behavior

JEL Classification: K12, K3

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: https://ssrn.com/abstract=1443908

Shmuel I. Becher

Victoria University of Wellington

P.O. Box 600
Wellington, 6140
New Zealand

HOME PAGE: http://www.victoria.ac.nz/sacl/about/staff/samuel-becher

Esther Unger-Aviram (Contact Author)

Sapir Academic College ( email )

Hof Ashkelon, 7916500
Israel
972-8-6802869 (Phone)

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