On-Line Boilerplate: Would Mandatory Website Disclosure of E-Standard Terms Backfire?

Abstract

This article analyzes whether mandatory website disclosure of e-standard terms, advocated by some as a potential solution to market failures when consumers contract over the Internet, potentially may backfire. By mandatory website disclosure, I do not mean a clickwrap presentation of terms, in which a consumer must click I agree or the like on a screen presenting the terms prior to the completion of a transaction in progress. Mandatory website disclosure would require a business to maintain an Internet presence and to post its terms prior to any particular transaction.

The problem is not that website disclosure would increase the cost of doing business, which would be passed on to consumers in the form of higher prices. Businesses have been unable to demonstrate that displaying their terms on their websites would be costly. Nor should drafting rules that implement the law be too difficult. Businesses could be required to display their terms on their homepage or on another page reachable directly through a clearly identified hyperlink. Further, businesses could be required to prove the availability of their terms by furnishing relatively inexpensive archival records of their websites. Website disclosure may backfire, however, because it may not increase reading or shopping for terms or motivate businesses to draft reasonable ones but, instead, may make heretofore suspect terms more likely enforceable.