Title

Reassessing Assent-Based Critiques of Adhesion Contracts

Document Type

Article

Publication Date

2015

Abstract

Contracts of adhesion are commonly criticized because of perceptions that such contracts lack the same quality of mutual assent that is present in fully-dickered agreements. This Article challenges such assent-based critiques in the context of Internet-based contracting. This challenge is based upon the proposition that even if producers provided extraordinary opportunities for consumer assent to contract terms, such assent would not meaningfully change the terms of producer contracts.

Unlike mail or phone order transactional systems, internet-based contracting provides for the possibilities of rapid and low-cost changes to price menus for various contract options and the ability to price accurately contract terms that the parties may wish to include in their agreements. Thus, Internet-based contracting permits producers to offer consumers a la carte contract choices and to determine how to price those choices. Given sufficient information, producers could theoretically offer consumers meaningful choices over every term in a contract, provided that the consumer would be willing to pay for those choices. The resulting “selection assent” by the consumers would be for all intents and purposes largely indistinguishable from the type of assent rendered in a fully-dickered contract.

But producers still control the prices at which they offer goods and services. Even though the hypothetical contract that would result from finely-grained selection assent could be highly-customized, so long as the producer retains power to set the prices of various contract terms consumers may be driven to the contract terms preferred by the producer. Thus, producers could charge prices that no rational consumer would pay if a particular consumer wanted to contract away from terms such as mandatory arbitration or a class action waiver. Even if some nonrational consumers chose to purchase customized terms, the lost network benefits would limit the producer’s exposure to liability from a few oddballs who bargained for the ability to litigate or to maintain a class action. Additionally, actual experience with clickwrap contracts shows that consumers almost never read the contracts and might be willing to accept without serious inspection an option simply to take the lowest cost terms offered by the producer even if they were given the power to select different terms for increased prices. Consequently, investments in improving the quality of consumer assent—even in the potentially superior context of selection assent to all possible terms of the contract—may not improve the quality of the resulting contract. These conclusions suggest that assent-based critiques of adhesion contracts lack persuasive force in the Internet-based contracting context, and that more powerful critiques should focus on the pricing of adhesion contracts and adhesive contract terms.

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