[Editor’s note: We interrupt our Boilerplate Symposium to bring you this report from Shubhs Ghosh on another discussion of Margaret Jane Radin’s Boilerplate: The Fine Print, Vanishing Rights and the Rule of Law.
A panel of five contracts law scholars met to discussMargaret Radin’s Boilerplate in front of an audience of over thirty attendees at the annual Law & Societymeeting in Boston on Saturday, June 1, 2013. Tal Kastner of Princeton University did a great job moderating andraising a provocative discussion. Although scheduled to end at 6:15 pm, theattendees stayed until almost 7 pm. Whatfollows is a brief write-up of the discussion with my own commentsinterspersed.
Thereaders included Stewart Macaulay, David Campbell, Aditi Bagchi, Peter Benson,and Guy Rub, speaking in that order. Stewart was positive about the book and began his comments with areminder of the anti-lawsuit attitude given voice in tort reform. Therestrictions on rights that occur through boilerplate, he suggested, is afurther reflection of this attitude as boilerplate drafters limit remedies andrights of consumers and their access to courts. As Stewart put it, advocates of court reform complain aboutmoney-chasing tort and class action attorneys but there is no mention of howmuch corporate lawyers make in drafting rights-limiting boilerplate clauses.Stewart ended his comments with skepticism about Radin’s proposals for top downreform from the legislature, whether federal or state.
DavidCampbell was more critical of the book, especially what he described as Radin’sidealized portrait of the contract bargain. Not all terms are always deliberated by the parties, but nonethelesscontract terms can be read into the contract by courts. He was particularly skeptical that the solution lay outside contract. Properly applied, doctrines like formation, unconscionability and othercontract terms can limit the negative applications of boilerplate. Unfortunately, some courts in the UnitedStates have not been enforcing the existing law in a reasonable manner.
AditiBagchi emphasized Radin’s theme of democratic degradation, boilerplate’s rolein limiting key rights of citizenshipthrough terms that remove rights of access to courts and compensation forinjury. Although Aditi was less concerned with loss of procedural rights (such asclass actions), she agreed that boilerplate terms should receive greater scrutiny whenthey involve limitations on compensation for personal injuries. Introducing theconcept of a social wage, Aditi made the point that liberal society extolscontractual freedom as part of a broader array of rights delineated in tort, propertyand other regimes. What society deems tobe waivable through contract rests on choices regarding what should beallocated through markets and what should be allocated through political processes. Boilerplateallows a shift of these choices without democratic deliberation. The market de facto and de jure determinesindividual rights.
PeterBenson elaborated on some of the critical points raised by David Campbell. Introducing a comparative perspective fromCanada and the EU, where boilerplate terms are regulated, Peter emphasizeddoctrines within the United States that could also serve to limit theimposition of noxious terms through boilerplate. The challenge Peter posed isidentifying a legal standard for what terms would be deemed noxious, or troublesome. Commenting on Radin’s development ofsuch standards subsequent to the publication of her book, Peter questionedwhether such standards would be workable. He described them as highly manipulable and indeterminate.
GuyRub ended the formal comments with criticisms of Radin’s proposed market-basedand state-based solutions. Disclosure-type solutions would not work even ifdisclosures were simplified and coded so that they could be readily digested. Consumers eitherwould tune such information out or would be willing to trade off unfavorable termsfor a lower price. Similarly, anylegislative solution would be subject to the same capture that gave rise toboilerplate. Guy provided the example offederal legislation on arbitration as an example. Guy did suggest grassroots-like solutions involving activism through exposure of noxious termsthrough social media and blogs. Such activism could be more effective, hesuggested, than top-down regulation.
Theinteractions continued with Peggy’s responses. She took issue with some broad characterizations of her book,particularly her view of an idealized contract. Her concern is withoverreaching by business entities in drafting terms that severely limit therights of consumers. As she pointed out,she never said that no rights can be waived or limited. But some companies go too far in limitingtheir liability in the daycare and elder care contexts. Such noxious terms,she suggested, may have more to do with insurance companies than with theactual service providers. Nonetheless,the market dynamics lead to a market failure that occurs through boilerplateterms that severely shift risks to consumers in market transactions. The worlddoes not have to be that way. Drawing aconnection with her work on market inalienability, Peggy argued thatboilerplate forces consumers to alienate fundamental attributes of citizenshipthrough take it or leave it offers. Sympathetic to the comments on her proposedsolutions, she tantalizingly suggested that a possible solution would be a returnto an earlier common law of contract that existed before the law took apro-business turn. She appealed to anolder generation of common law judges to offer a correction to this turn. I wondered whether such judges actually existanymore.
Discussionafterward was lively. Tal Kastneremphasized points about democratic degradation and the decline of communicationand deliberation. Richard Lempertpointed out the betrayal of trust that occurs with boilerplate as consumers areinvited to trust companies through the signing of boilerplate terms that aredesigned to “screw consumers.” Richardsuggested that government may be trustworthy than private businesses, contraryto contemporary rhetoric. Amy Kastelyraised a point about the drafting of the Restatement on Consumer Contracts thatmight exacerbate the problems with boilerplate. Robert Gordon questionedwhether boilerplate should even be referred to as private ordering since itrepresented the imposition of terms by dominant players backed up by thesanctioning power of the state. Other points (which I could not attribute) weremade about the regulatory approach to standard terms in the Netherlands and thepossibilities of consumer activism to expose consumer-unfriendly terms thatprominent companies impose through boilerplate.
TheAuthor Meets Reader panel was a stimulating event. My own thoughts are that in some instancesboilerplate in contract is used to realign the rights of consumers withouthaving to engage in the democratic process. The consumer rights that companies may want to delimit could be imposedthrough legislation. In many instances,such legislative efforts would fail. Boilerplate provides a way to impose a change in underlying entitlementswithout having to engage the political process. In such situations, there is areal threat to the democratic process as market processes dominate.
Thediscussion of private power, public power, and individual rights made me thinkof Shelly v. Kramer, the landmark case in which judicial enforcement ofracially restrictive covenants were deemed to be state action for the purposesof the Equal Protection Clause. If boilerplate is substituting for legislation,then perhaps noxious terms should be the basis for a due process or otherconstitutional violation. I raise thispoint to highlight the underlying issues as well as to pinpoint solutions. No court would be likely to adopt such abroad reading of Shelly v Kramer, a case that has already been limited to itsnarrow facts. But where constitutional efforts invariably fail activism on thelegislative and through market pressure serve as more effectivealternatives. Margaret Jane Radin’sBoilerplate is a great book about legal reform in a world where contracts andmarket processes have been used to displace democratic deliberation andlegislation.
[Posted, on Shubha Ghosh’s behalf, by JT]
