Fiduciary Boilerplate: Locating Fiduciary Relationships in Information Age Consumer Transactions

Abstract

The result of applying general contract principles to consumer boilerplate has been a mass transfer of unrestricted rights to use and sell personal information from consumers to companies. This has enriched companies and enhanced their ability to manipulate consumers. It has also contributed to the modern data insecurity crisis. Consumer transactions should create fiduciary relationships between firm and consumer as a matter of law. Recognizing this fiduciary relationship at law honors the existence of consumer agreements while also putting adaptable, context-sensitive limits on opportunistic behavior by firms. In a world of ubiquitous, interconnected, and mutable contracts, consumers must trust the companies with which they transact not to expose them to economic exploitation and undue security risks: the very essence of a fiduciary relationship. Firms owe fiduciary duties of loyalty and care to their customers that cannot be displaced by assent to boilerplate. History, doctrine, and pragmatism all support this position.

Keywords: privacy, data protection, contracts, fiduciary duties, duty of loyalty, duty of care, consumer law