Boilerplate Symposium Part XI: Aditi Bagchi on Boilerplate Waivers

This is the eleventh in a series of posts reviewing Margaret Jane Radin’s Boilerplate: The Fine Print, Vanishing Rights and the Rule of Law.

Aditi Bagchi is an Associate Professor at the Fordham University School of Law.

Professor Radin’s Boilerplateis a pragmatist repudiation of an important social and legal phenomenon.   That practice has a number of features:  (1) waivers of rights and liability containedin boilerplate are often unknown to the individuals who grant those waivers (2)consumers need to waive common lawand statutory rights in order to purchase a wide range of goods and services,many of which are regarded as essential to ordinary American life (3) thewaivers in boilerplate govern so many contractual relationships that somerights otherwise granted by law are effectively eliminated for large portionsof the consumer population.

Much of the literature on boilerplate focuses on the firstfeature of boilerplate, above.  Radin hasan argument about normative degradation and the poor quality of consent toboilerplate.  But I think the mostimportant contribution of the book is to highlight features (2) and (3).

The fact that consumers need to waive many rights, includingthe right to compensation for harm incurred by the negligence of others and theright to pursue legal remedies in courts or by way of class actions, is notimportant because it renders their consent ineffective.  (I would argue it does not.)  The fact of necessity is important because itexplains feature (3) and suggests that the mass “rights deletion” that Radinobserves does not necessarily reflect consumers’ collective preferences.

Whether consumers prefer contracts with or without boilerplate,i.e., whether they are prepared to pay to preserve some rights now usuallywaived in consumer contracts, depends on the decision mechanism by which thatpreference is expressed.  Because manyrights that private individuals have against one another are default rightsthat individuals are free to alienate, we effectively use the market to sortconsumer preferences.  The result is thatindividual consumers decide whether, on the margin, the value they might derivefrom a legal right is worth the money they save from giving it up, or whetherit is worth the value of the good or service to which that waiver isattached. 

The deep question that Radin raises in her discussion ofdemocratic degradation is whether markets are indeed the right way to decidethe scope of some legal rights. Especially where the frequency or distribution of a right in society hasimportant cumulative effects on legal culture or social practice, we might wishto remove certain rights from the marketplace and decide through collectivizeddecision-making (i.e., legislative action or inaction) the scope of rights thatgovern certain private interactions.  Oneof her most compelling examples is the case of copyrights that individualsfrequently waive.  She persuasively observesthat we may have a collective interest in the wide diffusion of copyrights thatis underserved by the separate decisions of millions of individuals to waivetheir copyrights at a small price.

More generally, we need to think about what proportion ofour private rights (rights held against other private individuals) shoulddepend on our market power.   The idea ofa “social wage” refers to the proportion of our material resources that dependson our status as citizens — as opposed to our market wage, which is the proportionof our income that turns on our performance in the marketplace.  Countries differ in their social wagelevel.  For example, countries withnational health care or generous unemployment benefits make your materialsituation somewhat less dependent on your labor market position than incountries without public health care or generous unemployment benefits.  The United States has a low social wage ascompared to other developed countries of comparable wealth.  We probably also have a “low private rights”regime, inasmuch as individuals vary (more than elsewhere) in their ability topreserve legal rights depending on their ability to pay for them.   I imagine that whether this outcome isacceptable turns significantly on the particular right at issue.   Forexample, we might reject a regime under which service providers exercisegreater caution to avoid bodily injury when dealing with some consumers thanwith others.  Yet we might be comfortablewith a regime in which some proportion of the population relies primarily onarbitration for redress.  We can thankRadin for highlighting these important social choices.

[Posted, on Aditi Bagchi’s behalf, by JT]