Download this Paper Open PDF in Browser

Boilerplate's False Dichotomy

51 Pages Posted: 7 Apr 2017  

James Gibson

University of Richmond School of Law

Date Written: April 5, 2017

Abstract

The argument against enforcing boilerplate contracts (i.e., contracts that no one reads) seems clear. Indeed, if this were a court case, we would say that the jury is in; the evidence against boilerplate is overwhelming. Yet the judge has yet to render judgment. Courts continue to enforce boilerplate terms, and even those scholars who have exposed boilerplate as an emperor with no clothes are reluctant to gaze upon its nakedness and condemn its use.

This reluctance originates in an assumption that pervades the boilerplate debate. Courts and commentators alike view boilerplate as necessary to the modern transaction. When asked to set it aside, then, they confront a dichotomy: either enforce boilerplate terms or wreak havoc on the consumer economy. When the choice is so presented, it is no choice at all. Living with boilerplate is better than living without mass-market commerce. We would rather be naked than dead.

This article shows that the dichotomy is false. First, it establishes that it is possible doctrinally to sever boilerplate from other terms of the consumer transaction, such that the transaction can proceed. Second, it demonstrates that the resulting transaction is theoretically feasible. When default rules take boilerplate’s place, the result is either no economic disruption at all, or economic disruption that shakes things up in a positive way. Finally, it shows that this approach is empirically viable; I use a case study of boilerplate contracts from a real-world consumer purchase to prove that there is a realistic third option — the boilerplate-free transaction.

Keywords: Contracts, Boilerplate, Form Contracts, Information Costs, Contracts of Adhesion, Consumer Protection, Law and Economics, Severability, Default Rules, Penalty Defaults, Licensing, Warranties, Arbitration, Class Actions

JEL Classification: K12, K42

Suggested Citation

Gibson, James, Boilerplate's False Dichotomy (April 5, 2017). Georgetown Law Journal, Forthcoming. Available at SSRN: https://ssrn.com/abstract=2947328

James Gibson (Contact Author)

University of Richmond School of Law ( email )

28 Westhampton Way
Richmond, VA 23173
United States
804-287-6398 (Phone)
804-289-8683 (Fax)

HOME PAGE: http://law.richmond.edu/faculty/jgibson/

Paper statistics

Downloads
169
Rank
152,215
Abstract Views
659