Wednesday, August 16, 2006
One of the hottest topics in contract law these days is the rise of new forms of mass-market contracts. These include "shrinkwrap" (contract terms included inside a closed box), "clickwrap" (those screens that require you to click "I agree" to various terms), and "browsewrap" (terms put on a web site that you don't actually have to click to agree with).
These practices are controversial, with proponents pointing out that they streamline transactions and allow businesses to better control their liabilities, while opponents point out the dangers of oppressive terms that can be hidden from the buyer.
We have faced a situation like this before, decades ago. As business-to-business commerce became more common in the middle of the 20th Century, companies began putting standard contract terms on the back of their purchase orders and shipment invoices. When each side to a contract used such a form, courts had to confront the question of whose form controlled. After unsuccessful judicial experimentation with a variety of rules, the Uniform Commercial Code resolved this "battle of the forms" by adopting a compromise under which if the terms conflicted, neither party's terms became part of the contract unless the party demonstrated its willingness to forego the deal over it. Rather, the default rules of contract law applied where the parties' standard forms disagreed, but where neither party in fact insisted on those terms.