26 Pages Posted: 14 Mar 2010
Date Written: February 26, 2010
European law gives consumers the right to withdraw from a range of contracts for goods and services; American law, with narrow exceptions, does not. Yet merchants in the United States frequently provide by contract that consumers have the right to return goods. We analyze the right to withdraw in a model that incorporates a tradeoff between allowing consumers to learn about goods that they purchase and protecting sellers from the depreciation of those goods. The right to withdraw - at least, as a default rule - has a plausible economic basis. We identify a nascent version of it in the well-known, controversial case of ProCD v. Zeidenberg.
Suggested Citation: Suggested Citation
Ben-Shahar, Omri and Posner, Eric A., The Right to Withdraw in Contract Law (February 26, 2010). U of Chicago Law & Economics, Olin Working Paper No. 514. Available at SSRN: https://ssrn.com/abstract=1569753 or http://dx.doi.org/10.2139/ssrn.1569753