ALI's Restatement of the Law of Consumer Contracts: Perpetuating a Legal Fiction?
37 Pages Posted: 4 Dec 2020
Date Written: November 20, 2020
The American Law Institute’s proposed Restatement of the Law of Consumer Contracts has undergone a lengthy process of drafts and discussions, but the road to completion has been rocky. Indeed, only one of nine proposed sections have thus far been adopted by the ALI membership, despite years of work on the project. Much of the criticism centered on the proposal’s definition of consumer assent to (or adoption of) standard contract terms, which as currently drafted states that consumers are bound by contract terms of which they have had notice and an opportunity to review, and have manifested assent in some reasonable form. This principle would apply regardless of the fact that almost no consumers read or understand standard contract terms beyond the core terms of the transaction, especially when the terms are part of online commerce. This model perpetuates a “legal fiction” that would allow judges to assume assent even though such assent is neither informed nor meaningful. The Reporters proffer the defenses of unconscionability and deception to protect consumers from business overreach, but this approach puts an undue burden on consumers who put their faith in the law to protect them from unfair or deceptive contract clauses. At this point, the ALI should either terminate the project, reframe the project to something other than a restatement, or make some major amendments to the section on adoptions of standard terms, as suggested in this article.
Keywords: consumer, contract, ALI, legal fiction, online contracts, standard form contract terms
JEL Classification: K10, K12, K20
Suggested Citation: Suggested Citation