Hillman on standard forms

No one has been doing more interesting work on the issue of standard-form contracting than Bob Hillman of Cornell.  He has a new paper out on the subject, On-line Consumer Standard-Form Contracting Practices: A Survey and Discussion of Legal Implications.  In it, he reports on a survey of first-year law students about whether and how they go about reading boilerplate terms in on-line transactions.  Click on the link for the abstract.

ABSTRACT

In a recent article, Standard-Form Contracting in the Electronic Age, 77 N.Y.U. L. Rev. 429 (2002), Jeffery Rachlinski and I analyzed whether contract law’s approach to the problem of paper standard forms can effectively govern electronic forms.  We thought the rational and cognitive reasons consumers fail to read their paper forms apply in the e-environment.  Further, although e-consumers do not face manipulative sales agents or impatient customers waiting in line but, instead, largely  contract at home in the evening without time constraints, e-consumers are impatient, even click happy, and therefore still do not read their forms or shop for the best terms.  Relying on these assumptions about how consumers treat their e-standard forms and evidence concerning how e-businesses use the Internet, we concluded that Internet contracting is not fundamentally  different from the paper world. Accordingly, major changes in the approach of contract law are not imperative.

This paper tests our assumptions about consumer behavior when agreeing to e-standard forms by offering some empirical evidence of consumer practices. I report on a survey of 92 contracts  students’ e-standard form practices. The survey inquired about all aspects of their practices, including frequency of contracting, the place and time of such contracting, whether they read their e-forms or shop for terms, the reasons for reading or failing to read, and the factors that would promote reading.

Although the survey results reinforce our assumption that consumers generally do not read their e-standard forms, the truth is a bit more complicated. A large majority of respondents purchase at night and at home. Nevertheless, few respondents read their e-standard forms beyond price and description of the goods or services as a general matter. Further, beyond price and description, a large minority of respondents do not read their forms at all. However, more than a third of the respondents read their forms when the value of the contract is high and more than a third read when the vendor is unknown. Further, a small cadre of respondents read particular terms beyond price and  description, primarily warranties and product information warnings. On the other hand, virtually no respondents read choice of law/forum or arbitration clauses.

The survey also reveals that impatience accounts most often for the failure of respondents to read their forms. Not surprisingly, respondents rarely shop for advantageous terms, despite the greater availability of terms on the Internet.
The paper concludes by analyzing possible legal responses to e-standard form contracting in light of the survey results.