Rules of Engagement in the Conflict Between Businesses and Consumers in Online Contracts

Abstract

In its purest form, the law of contracts is premised on the ideal of a transaction between parties of equal bargaining strength, who enter a mutually binding and beneficial agreement through the give and take of an open and fair negotiation. But the realities of a modern market economy have required adjustments to that ideal. The law pertaining to adhesion contracts provides an apt example of one such adjustment. In those agreements, the negotiated contract gives way to the form contract in order to promote efficiencies of scale that will benefit both businesses and consumers (and the economy in general) by permitting the parties to forego the formalities of negotiation and mutual assent. This alteration to contract law was justified to allow businesses to reduce their transaction costs, which translates as a benefit to consumers in the form of lower prices for goods and services. Any such adjustment, however, should not undermine the basic idea of a mutually beneficial agreement between the parties.

Keywords: contracts, online, adhesion, browse-wrap, click-wrap, shrink-wrap, consumer protection