Monday, November 18, 2013
This is the second in a series of posts on Nancy Kim's Wrap Contracts: Foundations and Ramifications (Oxford UP 2013). Our second guest blogger, Miriam A. Cherry, is a visiting professor at the University of Missouri School of Law and a tneured professor law at Saint Louis University.
The Duty to Draft Reasonably
Professor Nancy Kim’s “Wrap Contracts” is a foundational book, one that delves deeply into recent cases surrounding online contracting. Based on existing strands of contract theory, Prof. Kim expresses concern about the ways in which wrap contracts reinforce, and in many instances, amplify, one-sided contracting that may harm consumers in adhesion contracts. Pointing to a recent study, Kim notes that it would cost the average American Internet user the equivalent of $3,534 a year to read the privacy policies of each website that he or she visits.” (213) Noting that wrap contracts bear little similarity to the model of free assent that undergirds traditional contract theory, Kim sensibly argues for a more balanced model of drafting and enforcement.
Prof. Kim is not alone in calling for a more level playing field between businesses and consumers. Indeed, Margaret Jane Radin’s recent book, Boilerplate, contains a similar approach, and earlier work by legal academics, Todd Rakoff and Fredrich Kessler, provided what is now a well-understood and well-articulated argument against contracts of adhesion. The approach finds support in decades of writing by legal academics, ethicists, journalists, and consumer advocates, who have all voiced similar problems with the one-sided nature of adhesion contracts.
Granted, wrap contracts are different – and perhaps even more disturbing – than the original adhesion contracts that engendered them. But the fact remains that wrap contracts spring from - and build on – the same set of problematic assumptions that underlie adhesion contracts. Given that this literature is well-known, Prof. Kim faces a high hurdle to say something interesting and new.
The piece of Prof. Kim’s solution that most resonated was her idea of imposing a “duty to draft reasonably,” (176). Her solution would seem to be the converse of the current idea that consumers have a “duty to read.” Right now this is a one-sided duty without a corresponding responsibility on businesses posting wrap contracts or adhesion contracts. Some of the devices she describes in the book – how some online businesses have used wrap contracts as sword, shield, and crook (in instances where consumers are subject to overreaching behavior) reinforce the impression that Prof. Kim’s recommended intervention is needed. As such, imposing such a reasonableness requirement to make a wrap contracts enforceable seems eminently sensible. Prof. Kim’s book is timely, well-researched, and will play an important role in the debates about adhesion and wrap contracts that are sure to happen in years to come.
[Posted, on Miriam Cherry's behalf, by JT]