60 Pages Posted: 20 Jan 2021 Last revised: 4 Apr 2022
Date Written: December 22, 2020
Sellers often make manipulative and dishonest claims about their products and services. Such assertions, often made in oral interaction between buyers and sellers, substantially influence consumers’ choices. This Article argues that the law currently underestimates, and does not properly respond to, the social harm that manipulative promises generate. Insights from behavioral ethics suggest that even ordinary, law-abiding sellers frequently have limited self-awareness of making such manipulative assertions. At the same time, contracting realities lead consumers to rely heavily on these oral assertions. When consumers discover they have been manipulated, it is often too late: pre-contractual oral representations are either dismissed by courts as puffery, qualified by sellers in the unread fine print, or extremely challenging to prove.
Against this background, we call for tighter scrutiny of sellers’ oral promises. We propose a spectrum of ex ante measures that regulators can utilize to monitor firms’ sales personnel training. We also suggest various means to make firms liable for oral misrepresentations made by their employees. Next, we recommend that courts apply a host of doctrines to mitigate toxic oral promises and restrict the enforceability of merger and integration clauses. We further suggest making use of educational campaigns. In making these recommendations, we illustrate how a clever mix of ex ante prevention tools and ex post liability measures can yield a more efficient and fairer market environment.
Keywords: Oral Promises, Precontractual Exchanges, Contracts, Consumer Law, Fraud, Behavioral Ethics, Law & Psychology
Suggested Citation: Suggested Citation