The Faulty Foundation of the Draft Restatement of Consumer Contracts

24 Pages Posted: 8 Feb 2019

See all articles by Adam J. Levitin

Adam J. Levitin

Georgetown University Law Center

Nancy S. Kim

California Western School of Law

Christina L. Kunz

Mitchell Hamline School of Law

Peter Linzer

University of Houston Law Center

Patricia A. McCoy

Boston College Law School

Juliet M. Moringiello

Widener University - Commonwealth Law School

Elizabeth Renuart

National Consumer Law Center

Lauren E. Willis

Loyola Law School Los Angeles

Date Written: February 7, 2019

Abstract

Professor Gregory Klass’s replication study of the Draft Restatement of the Law of Consumer Contract’s empirical analysis of privacy policies found troubling and pervasive problems with the Reporters’ coding of cases. We extended Professor Klass’s study with a replication of the coding of the two largest datasets supporting the Draft Restatement, those on the enforceability of unilateral contract modifications and those on the enforceability of clickwrap assent. For the replication, we reviewed 186 cases blind to the Reporters’ coding.

We found that nearly two-thirds of the cases in the unilateral modification dataset were irrelevant to the hypothesis tested by the Reporters. The irrelevant cases included business-to-business cases, vacated and reversed decisions, a duplicate decision, and cases determined on statutory grounds specific to credit card agreements. The remaining relevant cases were atypical, almost entirely involving enforcement of arbitration clauses, express contractual clauses permitting unilateral modifications, or credit card agreements.

Likewise, we found that nearly half of the cases in the clickwrap assent dataset were irrelevant to the Reporters’ tested hypothesis. The irrelevant cases included business-to-business cases, another duplicate decision, and cases with neither contracts nor clickwrap agreements. The overwhelming majority of the relevant cases involved the sui generis contexts of enforcement of arbitration clauses or forum selection clauses. Among such cases, we also found a materially higher rate of non-enforcement of clickwrap agreements than the Reporters found.

Based on our attempt to replicate the Reporters’ coding, we lack confidence that the Draft Restatement correctly and accurately “restates” the law of consumer contracts.

Suggested Citation

Levitin, Adam J. and Kim, Nancy S. and Kunz, Christina L. and Linzer, Peter and McCoy, Patricia Ann and Moringiello, Juliet M. and Renuart, Elizabeth and Willis, Lauren E., The Faulty Foundation of the Draft Restatement of Consumer Contracts (February 7, 2019). 36 Yale Journal on Regulation 447 (2019); Loyola Law School, Los Angeles Legal Studies Research Paper No. 2019-03; California Western School of Law Research Paper No. 19-3. Available at SSRN: https://ssrn.com/abstract=3330886

Adam J. Levitin (Contact Author)

Georgetown University Law Center ( email )

600 New Jersey Avenue, NW
Washington, DC 20001
United States

Nancy S. Kim

California Western School of Law ( email )

225 Cedar Street
San Diego, CA 92101
United States

Christina L. Kunz

Mitchell Hamline School of Law ( email )

875 Summit Ave
St. Paul, MN 55105-3076
United States

Peter Linzer

University of Houston Law Center ( email )

Houston, TX 77003
United States

Patricia Ann McCoy

Boston College Law School ( email )

885 Centre Street
Newton, MA 02459-1163
United States

Juliet M. Moringiello

Widener University - Commonwealth Law School ( email )

3800 Vartan Way
Harrisburg, PA 17110-9380
United States
717-541-3917 (Phone)

Elizabeth Renuart

National Consumer Law Center ( email )

77 Summer Street
Boston, MA 02110
United States

Lauren E. Willis

Loyola Law School Los Angeles ( email )

919 Albany Street
Los Angeles, CA 90015-1211
United States
213-736-1086 (Phone)
213-380-3769 (Fax)

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