All of us use form contracts. Given the contemporary ubiquity of click-wrap and brows-wrap on the internet, all of us use form contracts regularly, some of us more than once a week, I suspect. American contract law has pretty well settled on enforcing form contracts like any other contracts. No subjective meeting of the minds is necessary, merely a "manifestation of assent."
There has always been some pushback on affording form contracts, especially B2C (business-to-consumer) ones, with the same legal sanctions as the idealized (romanticized?) standard of a fully negotiated contract in which both parties have carefully reviewed all the terms before signing. Of late that resistance has taken the form of requiring greater disclosure of important terms that consumers are not likely to appreciate. Nancy Kim has recently written a book chapter titled "The Duty to Draft Reasonably and Online Contracts" (abstract here) that appears in COMMERCIAL CONTRACT LAW: A TRANSATLANTIC PERSPECTIVE (CUP 2012).
The other day I commented on an article by Todd Zywicki (here) in which he expressed growing appreciation for the common law's pragmatic approach over a hardcore libertarian or natural rights ideological take on the law. Kim's article suggests an increased level of pragmatism, one that reflects a move from inalienable natural rights (Murray Rothbard) to maximizing net social welfare by presuming all contracting parties to be rational maximizers of self-interest (Ronald Coase) to considering most consumer contract parties to be susceptible to well-crafted manipulation by the "form" of form contracts. Zywicki's "rational" actor replaced by ones who are more true-to-life. But at what cost?
Is there any moral justification for Kim's dissent from the juggernaut of a purely objective theory of contracts? Well, as long-time readers may remember, I posted here and here on the morality of promise-receiving. I suggested that the moral justification for promising (and, by extension, contracts) runs both ways: promisors have a duty to perform but promisees have duties as well. Where I end up on this question as it pertains to form contracts is part of my project for 2013 so stay tuned.
There has always been some pushback on affording form contracts, especially B2C (business-to-consumer) ones, with the same legal sanctions as the idealized (romanticized?) standard of a fully negotiated contract in which both parties have carefully reviewed all the terms before signing. Of late that resistance has taken the form of requiring greater disclosure of important terms that consumers are not likely to appreciate. Nancy Kim has recently written a book chapter titled "The Duty to Draft Reasonably and Online Contracts" (abstract here) that appears in COMMERCIAL CONTRACT LAW: A TRANSATLANTIC PERSPECTIVE (CUP 2012).
The other day I commented on an article by Todd Zywicki (here) in which he expressed growing appreciation for the common law's pragmatic approach over a hardcore libertarian or natural rights ideological take on the law. Kim's article suggests an increased level of pragmatism, one that reflects a move from inalienable natural rights (Murray Rothbard) to maximizing net social welfare by presuming all contracting parties to be rational maximizers of self-interest (Ronald Coase) to considering most consumer contract parties to be susceptible to well-crafted manipulation by the "form" of form contracts. Zywicki's "rational" actor replaced by ones who are more true-to-life. But at what cost?
Is there any moral justification for Kim's dissent from the juggernaut of a purely objective theory of contracts? Well, as long-time readers may remember, I posted here and here on the morality of promise-receiving. I suggested that the moral justification for promising (and, by extension, contracts) runs both ways: promisors have a duty to perform but promisees have duties as well. Where I end up on this question as it pertains to form contracts is part of my project for 2013 so stay tuned.
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