Saturday, November 13, 2004
Contracts scholarship has seen a good many attempts to reconcile standard form contracts with the idea of "assent." A new article by Darian Ibrahim, The Case for Extending Comparative Responsibility to Standard Form Contracts, offers a yet another potentially promising approach, suggesting that we import the tort doctrine of "comparative responsibility" into the process. The abstract:
Commercial realities tell us that there is no "meeting of the minds" between sellers and consumers in today’s standard form contracting. Contract law has unsuccessfully sought to overcome this divergence between theory and practice, and public law alternatives have not taken hold. I contend that tort law's principle of comparative responsibility, which apportions responsibility for a negative result between the parties that created it, provides a viable solution to this problem.
Under a comparative responsibility framework, the enforceability of standard form boilerplate would depend on the relative faults of sellers and consumers for the lack of mutual assent. If the seller is adjudged more responsible (e.g., because it produced an oppressive or incomprehensible form), the boilerplate would be replaced with government-drafted default terms. If, on the other hand, sellers improve their contracting practices and form content, yet consumers continue to sign without reading, the boilerplate would be enforced. In such cases, it can be said that consumers have a meaningful chance to assent to the form, and instead they have assumed the risk of being bound by unfavorable terms.
A standard form principle of comparative responsibility strikes the right balance between maintaining an efficient market and preventing consumer exploitation. It is fairer than current law because it induces sellers to draft and present better forms, and is more efficient because it brings market factors into play by incentivizing consumers to read and shop the improved boilerplate terms.