Ending the License to Exploit: Administrative Oversight of Consumer Contracts

Abstract

This Article calls for a conceptual shift toward the scrutiny of exploitative consumer standard form contracts. Current approaches to consumer standard form contracts assume that imbalanced and unfair terms can be adequately challenged by aggrieved consumers and effectively scrutinized by vigilant courts. Some even believe that market forces and reputational constraints alone can deter firms from employing exploitative terms in their form contracts or dissuade them from actually relying on such terms. Criticizing these assumptions, the Article suggests supplementing the current means of addressing exploitation in standard consumer contracts by a dynamic preventive system of public control.

Specifically, we propose a professional system of administrative oversight over the content of consumer form contracts. The Article demonstrates how such a machinery can efficiently tackle the widespread supply and use of unfair terms as well as unconscionable and even llegally invalid boilerplate terms. While not a panacea, such a regime has the promise of shifting the burden of confronting exploitation in consumer contracts from a feeble and ineffective system of private enforcement to a sophisticated and robust system of public oversight.

Keywords: consumer contracts, boilerplate, unfair terms, illegal terms, unconscionability, exploitative contracts, prevention, private and public enforcement, administrative control