Boilerplate Symposium Part XV: Cheryl Preston on Boilerplate and the Role of Courts

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

Cheryl Preston is the Edwin M Thomas Professor of Law at Brigham Young University’s J. Reuben Clark Law School.

Professor Radin’s book is a monumental effort to bringtogether in one place various facets of the seemly intractable problem ofnon-negotiated standard term contracts and to offer creative insights at eachstep. This legal problem is not new: Judge Cowen in Cole v. Goodwin, 19 Wend. 251, 273-74 (N.Y. Sup. Ct. 1838), was adamantthat a common carrier could not post a notice of its intent not to be liable atthe station and claim that each passenger entering the train gave contractualconsent to waiving liability. To hold otherwise would change the deal from “giveme a due reward [cost of passage], and I will be accountable as a commoncarrier” to “‘give me the same reward,’ (for the carrier fixes it; it may beless, but it may also be more,) ‘and yet, I claim to throw all risk upon you,or such a degree of it as I please.’” The judicial mindset later changed, andby the early 1900s courts lined up with businesses in generally enforcing suchterms. Nonetheless, early courts ran interference with unconscionability andequivalent doctrines. The evolution to multitudes of daily online contractshidden behind links, without size limitations, signatures, or someone toexplain terms, as well as the increasing reluctance of judges to interfere,requires new analysis such as that offered by Radin.

Once the problem is exposed, the more difficult endeavor isframing a feasible solution. By characterizing such contracts as a form of “democraticdenigration,” Radin suggests that the fundamental remedy is for legislatures,acting as democratic representatives of the people, to draw limits aroundpowerful economic actors’ ability to override the default rules of enlightened contractdoctrine. Radin argues that boilerplate schemes make a “sham” of democraticgovernance because they take away entitlements given through the democraticprocess “after extended debate and fierce political struggle.” Democraticordering “at least give[s] us a voice” because politicians can be voted out ifpeople are unhappy with what they enact.

Returning to the polity for a solution is dubious for threereasons. First, outside of copyright and perhaps employment, it is something ofa stretch to say that the democratic process has created protections that suchcontracts “delete.” The regulatory rules that exist are at best default,subject expressly to the right to contract around them. What we seem to havelost, rather, is a judiciary willing to maintain reasonableboundaries of the kind envisioned by Karl Llewellyn and other Realistscholars.

Second, most consumers seem utterly content to be bound toterms they would not read even if such terms were brought forcefully to theirattention, could not understand if read, and could not appropriately evaluateas risks. But the same problem applies to voters. Until consumers are educatedor fall victim to such a contract, they will not understand the problem enough tovote out politicians who do not protect them. An unorganized few cannot changeelections any more than they can convince firms to change undesirable contractterms.

Third, current legislative bodies seem effectively “influenced”by the same business interests that control consumers by contract. Money buyslobbyists, makes campaign contributions, and spins information, just as ithires the lawyers who draft and defend these contracts and the programmers andmarketers who decide how to hide them. In the current political climate,consumers’ ability to influence change with election votes seems more of astretch than consumers’ ability to unite to demand fairness with economicvotes.

While Radin leans toward tort law as a solution, in Chapter10 she offers a range of interesting possibilities for giving consumers theknowledge to make intelligent choices in contracting. Her suggestions includerating agencies, seals of approval programs, and contract term filtertechnology. Given the irrationality of reading all form contracts, workableinitiatives depend on some surrogate to synthesize contract content and createa basis of comparison that a consumer can digest and act upon in seconds.Without a government mandate, how can consumer power be marshaled to organizeand fund such programs? What existing organization has the resources to educateconsumers or issue legal standards with sufficient credibility? A Statement ofPrinciples issued by the American Law Institute might be influential, but thepainful process of birthing a timid Principlesof the Law of Software Contracts, and a failed revision to Article 2, show that the same powers and influences compete in that arena as well.

Until social change is possible, the courts remain the bestdefense of those unable to evoke sufficient power and money on their own behalf.As law professors, we need to train students to value principles of fairnessand balance. As legal scholars, we need to encourage judges and contractdrafters to stop exploitation.

[Posted, on Cheryl Preston’s behalf, by JT]