Defeating the Empire of Forms

Abstract

For generations, contract scholars have waged a faint-hearted campaign against form contracts. It’s widely believed that adhesive forms are unread and chock full of terms that courts will not, or should not, enforce. Most think that the market for contract terms is broken, for both employees and consumer adherents. And yet forms are so embedded in our economy that it’s hard to imagine modern commercial life without them. Scholars thus push calibrated, careful solutions that walk a deeply rutted path. Notwithstanding hundreds of proposals calling for their retrenchment, the empire of forms has continued to advance into new areas of social life: we now click to agree to more written contracts every few days than our grandparents did in their entire lives.

This Article argues that the swelling scope of the empire of forms is itself a social problem, and it demands both a new diagnosis and a structural reform. Forms are everywhere in our lives because we’ve brought them with us in our pockets, and on our devices. Contract law hasn’t changed to make forms more valuable; the cost of contracting has fallen to make them ever cheaper to distribute. This makes them increasingly less valuable to firms. All the while, cheap forms externalize too many harms and threaten important legal values which we should defend. What’s needed is a remedy that cuts off the supply of cheap forms at its source and returns us to a world with fewer written contracts. I offer that reform with a proposed state law: the statute of frauds flipped upside-down. It would make low-stakes written form contracts, directed at either employees or consumers, simply unenforceable. I defend the statute against charges that it is worse medicine than the mass contracting disease it seeks to cure.

Keywords: Form contracts, externalities, transaction costs, statute of frauds, contracts, e-commerce

JEL Classification: K12, D86, K1