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Monday, November 18, 2013

Wrap Contracts Symposium, Part I: Ryan Calo

This is the first in a series of posts on Nancy Kim's Wrap Contracts: Foundations and Ramifications (Oxford UP 2013).   Today's contributor, Ryan Calo, is an assistant professor at the University of Washington School of Law  and the Faculty Director of the Tech Policy Lab at the University of Washington.  He previously served as a director at the Stanford Law School Center for Internet and Society (CIS) where he remains an Affiliate Scholar.  

Ryan Calo

I am delighted to contribute to this online symposium around Nancy Kim’s new book, Wrap Contracts: Foundations and Recommendations.  Even if you are closely familiar, as I am, with Kim’s previous work, I recommend picking up a copy; the author both synthesizes and meaningfully extends her important thinking on the evolving role of contracts in a digital world.  The sophisticated practitioner, too, has something to gain, particularly from later parts of the book where Kim explores the origins and strategic uses of wrap contracts and makes recommendations that attorneys may one day encounter in a court opinion or Federal Trade Commission complaint. 

Indeed, Kim is one of only a handful of legal scholars (another is Woodrow Hartzog, whom Kim mentions) who engage in a sustained way with the growing importance of interface design (i.e., the very look and feel of a website or digital product) on contemporary contract formation and enforcement.  You see this, for instance, in her wonderful discussion of responsible drafting in Chapter 11.  And while I cannot show causation, as opposed to correlation, I would note that the Federal Trade Commission has in recent years brought enforcement proceedings based in part on interface design, in one case hiring a human-computer interaction specialist to act as an expert witness.

What has most amazed me in my own examination of this space is the range of possibilities the digital environment offers.  If there were one critical note I would sound about Kim’s otherwise substantively and methodologically comprehensive book, it is that she does not always countenance the full boundaries of consumer experience.  Kim cites to Oren Bar-Gill (at page 83) for the proposition that the growing complexity of contracts hides their true costs from the imperfectly rational consumer.  Kim also develops various scenarios in Chapter 10 meant to underscore the powerlessness consumers feel to address conflicts with web companies.  But the prospect for mischief is worse still: As the short title of Bar-Gill’s book, Seduction By Contract, suggests, companies may leverage what they know about consumer psychology to design purposefully disadvantageous terms.  I would (and do) go further in forthcoming work, arguing that firms increasingly control every aspect of their interaction with consumers.  We should expect this control, coupled with the firms’ meticulous knowledge of consumers and their economic incentive to maximize profit, to lead to a wider variety of digital abuses than Kim acknowledges.  Contract becomes not a just a shield against liability here but, in a few instances, a species of license for ethically questionable business practices.

Wrap ContractsSimilar criticisms could focus on Kim’s pessimistic assessment of the potential prospective advantages that a more mediated world might have for consumers. Kim explores how a better understanding of design can improve disclosure and contract in an online environment.  I certainly agree, as Kim notes, that the digital nature of contemporary commerce could result in enhanced disclosure, and maybe even drag notice beyond inscrutable prose and into the twenty-first century.  But what I expected and did not see—what I hope still to see from Kim—is a response to the work of Scott Peppet.  Peppet argues that increased digitalization could, if anything, strengthen the traditional understanding of freedom of contract by conferring on consumers radical new tools of evaluation and comparison.  I would want to understand why the dangerous ascendance of wrap contracts is not substantially offset by other digital developments that empower consumers.  (Eric Goldman recently made this comment about my work, so it is top of mind).

To summarize: Kim’s is a rich and engaging book that I would recommend to anyone who is intellectually curious about consumer contracts or whose professional life in some way depends on them.  I learned a lot and agree with many of Kim’s recommendations.  By way of critique, I would say only that Kim’s book does not answer every single fascinating question about digital contract.  Perhaps no book could, nor would I necessarily want hers to.  Then I would not so eagerly anticipate Kim’s future work. 

[Posted, on Ryan Calo's behalf, by JT]

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