The Myth of the 'Opportunity to Read' in Contract Law

Abstract

Standard form contracts in consumer transactions are usually not read by consumers. This "unreadness" of contracts creates opportunities for drafters to engage in unfair trade practices. Various doctrines of contracts and consumer protection law address this concern. One of the prominent solutions coming out of recent proposals for reform is to give individuals a more substantial opportunity to read the contract before manifesting assent. With the greater opportunity to read, more transactors will actually read the terms and assent to the boilerplate will be more "robust." This Essay argues that solutions that focus on providing consumers an opportunity to read are useless, and can potentially be harmful. Most likely, greater opportunity to read would not produce greater readership of contracts-not the type that can help people make informed decisions-and the purpose of this solution would not be achieved, and could have unintended consequences. Even if the compliance with the requirement of opportunity-to-read is fairly cheap (e.g., giving consumers access to the boilerplate in advance), making this a central feature of the legal regulation of standard form contracts makes little sense. The paper ends by proposing non-legal approaches to making the contract terms more transparent, by building on market devices such as ratings and labeling.

Blind consent? A social psychological investigation of non-readership of click-through agreements.

“…As summarized by one leading legal scholar, non-readership reflects "an implicit surrender to cognitive limitations" and "a preference not to care." (Ben-Shahar, 2008).…”

“…(2) CTAs are written in incomprehensible legalese (Hartley, 2000;Masson & Waldron, 1994;Stolle, 1998); (3) consumers have no choice but to accept CTAs if they want the underlying product (Rakoff 1983;Hillman & Rachlinski 2002); (4) CTAs all say the same thing (Epstein, 2006); (5) courts will subsequently void any onerous terms in a CTA (e.g., using the "unconscionability" doctrine) (Gillette, 2004); (6) vendors' terms in CTAs are generally fair and reasonable (Gillette, 2004); (7) reputable vendors have no economic incentive to offer and/or to enforce unreasonable or unfair terms (Katz, 1998;Gillette, 2004); and (8) no one reads CTAs (Ben-Shahar, 2008).…”

OECD Digital Economy Papers

“…Worryingly, online terms and conditions appear to be getting longer and more difficult to understand (Marotta-Wurgler and Taylor, 2013 [62]; Warren, 2008[63]). In addition, the inability of consumers to negotiate online terms and conditions, especially with larger online businesses, may leave consumers with no real option than to agree to the terms and conditions, in which case there may be little benefit from reading (Ben-Shahar, 2008 [64]). …”

“…While text is often the default option; images, audio or video are often more effective for communicating with consumers (Zhenhui and Benbasat, 2007[86]; Benartzi and Lehrer, 2017 [5]). Box 4.2 provides a summary of the outcomes of an experiment which compared the effectiveness of various disclosures in the context of an online purchase of digital content.…”

“…[5]). It is not surprising that timing is important given that behavioural biases such as the endowment effect and commitment effect may limit the usefulness of some information if it is provided after a consumer has already decided to make a purchase.…”