Seductive Oral Deals

56 Pages Posted: 20 Jan 2021

See all articles by Shmuel I. Becher

Shmuel I. Becher

Victoria University of Wellington

Yuval Feldman

Bar-Ilan University - Faculty of Law

Meirav Furth

UCLA School of Law

Date Written: December 22, 2020

Abstract

Legal scholars have devoted considerable attention to contractual design that exploits consumers’ vulnerabilities (“the paper deal”). For example, scholars have cautioned against the inclusion of one-sided, exploitative, or unenforceable terms in standard form contracts, and proposed solutions to address these problems. However, scant attention has been given to the role of pre-contractual promises that are disclaimed or qualified in the fine print (“the oral deal”).

This Article uncovers the seductive power of misleading oral deals. Weaving together insights from behavioral ethics and social psychology, we argue that current approaches to such deals are undertheorized and develop a more nuanced approach.

We show that the law underestimates, and thus does not properly respond to, the harm of seductive oral deals. Seductive oral deals are both more potent and more ubiquitous than previously assumed. They are more potent because consumers’ contracting reality and tendency to trust others lead them to rely on salespeople’s oral assertions even when they are false. They are ubiquitous because even ordinary, law-abiding people, when operating as salespeople, find ways to justify mundane unethical behavior, such as lying to customers.

Seductive oral deals can harm both consumers and scrupulous competitors, erode important societal values, and undermine market efficiency. At the same time, consumers face substantial psychological, financial, evidentiary, and doctrinal hurdles should they wish to rely on precontractual oral interactions when the written contract disclaims what they were told. Against this background, the Article makes several recommendations that tackle the root causes that facilitate seductive oral deals.

Keywords: Oral Promises, Precontractual Exchanges, Contracts, Consumer Law, Fraud, Behavioral Ethics, Law & Psychology

Suggested Citation

Becher, Shmuel I. and Feldman, Yuval and Furth, Meirav, Seductive Oral Deals (December 22, 2020). Available at SSRN: https://ssrn.com/abstract=3766089 or http://dx.doi.org/10.2139/ssrn.3766089

Shmuel I. Becher (Contact Author)

Victoria University of Wellington ( email )

P.O. Box 600
Wellington, 6140
New Zealand

HOME PAGE: http://www.victoria.ac.nz/sacl/about/staff/samuel-becher

Yuval Feldman

Bar-Ilan University - Faculty of Law ( email )

Faculty of Law
Ramat Gan, 52900
Israel

Meirav Furth

UCLA School of Law ( email )

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