ContractsProf Blog

Editor: D. A. Jeremy Telman
Valparaiso Univ. Law School

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Friday, June 7, 2013

Cell phones, copyright and contracts

Ajit Pai, a commissioner of the Federal Communications Commission,wrote an interesting op-ed in yesterday's NYT.   He argues that consumers should be allowed to unlock their phone when they permissibly (i.e. not in breach of any contract) switch carriers. Some of you might be wondering - Huh?  Is that even illegal?  Don't I own my phone?  You're probably not alone.  As Pai notes, the Library of Congress decided that unlocking your phone violates the Digital Millenium Copyright Act of 1998.  (They basically removed an exception to the Act that permitted unlocking, as this article in the San Francisco Chronicle explains).  But, you might wonder, what does copyright have to do with what you can do with your cell phone?  A lot of people are wondering the same thing, but basically, software locks the cellphone to a specific network and the cell phone owner is a licensee of that software (and software is copyrightable).  Okay, now you understand what this has to do with copyright but what does this post have to do with contract?  Glad you asked.  Pai's op-ed argues, "Let's go back to the free market.  Let's allow contract law - not copyright or criminal law - to govern the relationship between consumers and wireless carriers."  It's interesting given that this blog has spent the last couple of weeks discussing the need for government intervention due to boilerplate - and yet, here's an example of government intervention into boilerplate that is not actually helpful to consumers.  Don't get me wrong - I'm not saying government intervention into boilerplate isn't a good thing sometimes (depends on what it is and how and why) - I just find it interesting that this example of government intervention is on an issue that protects businesses and hurts consumers.  Of course it shouldn't be surprising since lobbyists for carriers are way better organized and have more money and influence than consumer advocacy groups. And that gets to the heart of what's the matter with using contracts as the solution since the same dynamic is at play in the world of private ordering (see symposium on Boilerplate and the book itself, for more details).  Who knows what carriers might come up with in their contracts.  Would they try to "license" instead of sell their phones? In a perfect world, the free market might function, well, perfectly and private ordering would be the order of the day.  But we don't live in that world so an absolutist "no government intervention v. more government intervention" position doesn't work.

 

[Nancy Kim]

June 7, 2013 in Commentary, In the News, Web/Tech | Permalink | Comments (0) | TrackBack (0)

Coming Next Week: Two Guest Posts on Kenneth Adams' Contracts Drafting Style Manual

AdamsNext week, we will have two guests posts reviewing Kenneth A. Adams, A Manual of Style for Contract Drafting (3d ed.).

From the book's website:

With A Manual of Style for Contract Drafting, Kenneth A. Adams has created a uniquely in-depth survey of the building blocks of contract language. First published in 2004, it offers those who draft, review, negotiate, or interpret contracts an alternative to the dysfunction of traditional contract language and the flawed conventional wisdom that perpetuates it. This manual has become a vital resource throughout the legal profession, in the U.S. and internationally.

This is the third edition of A Manual of Style for Contract Drafting. One-third longer than the second edition (published in 2008) and in a larger format, it contains much new material and has otherwise been revised and supplemented, making it even more essential.

This manual's focus remains how to express contract terms in prose that is free of the archaisms, redundancies, ambiguities, and other problems that afflict traditional contract language. With exceptional analysis and an unmatched level of practical detail, Adams highlights common sources of confusion and recommends clearer and more concise alternatives. This manual is organized to facilitate easy reference, and it illustrates its analysis with numerous examples. Consult it to save time in drafting and negotiation and to reduce the risk of dispute.

Our reviewers are:

BarnhizerDaniel D. Barnhizer, Professor of Law & The Bradford Stone Faculty Scholar, Michigan State University College of Law.  

Professor Barnhizer graduated with honors from Harvard Law School, where he served as managing editor of the Harvard Environmental Law Review. After graduation, he was a judicial clerk for the Honorable Richard L. Nygaard, U.S. Court of Appeals for the 3rd Circuit, and for the Honorable Robert B. Krupansky, U.S. Court of Appeals for the 6th Circuit, sitting by designation on the U.S. District Court for the Northern District of Ohio. Professor Barnhizer has practiced as a litigator with the law firms of Hogan & Hartson and Cadwalader, Wickersham & Taft. Before joining the MSU College of Law faculty, he was an adjunct professor of law at American University - Washington College of Law, where he taught legal reasoning, research, and writing. At MSU Law, he teaches Contracts, Contract Theory, Business Enterprises, Securities Litigation, and Legal History.

Some of Professor Barnhizers scholarship can be found here.

Irma S. Russell, Dean and Professor of Law, University of Montana School of Law.

RussellIrmaPrior to coming to Montana, Dean Russell was the NELPI Professor and Director of the National Energy-Environment Law & Policy Institute at the University of Tulsa College of Law.  She became Dean of the University of Montana School of Law in 2009.

Dean Russell is immediate past chair of the ABA Section of Environment, Energy and Resources and the immediate past chair of the AALS Section of Natural Resources and Energy Law.  She is a newly appointed member of the Board of Dividing the Waters, an organization of judges and lawyers focused on issues of water adjudication in the Western United States.  She has served as the chair of the Professionalism Committee of the ABA Section of Legal Education and Admission to the Bar and as a member of the ABA Standing Committee on Professionalism and the ABA Standing Committee on Ethics and Professional Responsibility.  She also has served as a member of the Executive Committee and Secretary of the AALS Natural Resources Section and as chair of chair of the AALS Section on Professional Responsibility, the AALS Section on Socio-Economics, and as a member of the Publications Committee of the Center for Professional Responsibility.

Dean Russell earned undergraduate degrees in liberal arts and education, a master’s degree in English literature, and her law degree at the University of Kansas. She clerked for The Honorable James K. Logan, United States Court of Appeals for the Tenth Circuit. Russell engaged in private practice for several years in Kansas, Missouri, and Tennessee.

We look forward to some stimulating reviews and hopefully some fans of the book (and Ken Adams' blog on legal drafting) will chime in as well.

[JT]

June 7, 2013 in About this Blog, Books, Recent Scholarship, Weblogs | Permalink | Comments (0) | TrackBack (0)

Wednesday, June 5, 2013

New in Print, Including Three (Count 'em!) New Books from Larry DiMatteo

DimatteoLarry DiMatteo, of the University of Florida's Levin College of Law, has three new books to crow about:

Global Challenge of International Sales Law
Larry A. DiMatteo, Editor
Cambridge University Press 2013

Contributors

Camilla Andersen           Franco Ferrari             Ingeborg Schwenzer               Lisa Spagnolo

Bruno Zeller                    Ulrich Magnus              Harry M. Flechtner                 Stefan Kröll

Jan Ramberg                   Burghard Piltz             Vikki Rogers                            Pilar Perales Viscasillas

Ulrich Schroeter              Wolfgang Faber          Sieg Eiselen                           Jan Smits

Ole Lando                        Sonja Kruisinga           Petra Butler                            Corinne Widmer Lüchinger Hossam

El-Saghir                           Milena Djordjević       Tidas Kilmas                          Javier Solana Álvarez 

Luca Castellani                André Janssen            Matthias Spilker                   Marie Stefanini Newman 

Morton Fogt                       Aneta Spaic                 Martin Davies                       Sylvaine –Peruzzetto

Sörren Kiene                    Edoardo Ferrante        Francesco Mazzotta              Vladimir Pavić

Yehuda Adar                    Marco Torsello           Olaf Meyer                             Qi Zhou

Helena Haapio                 Claire Germain           Li Wei                                      Larry DiMatteo

 

Commercial Contract Law:  Transatlantic Perspectives
Larry A. DiMatteo, Qi Zhou & Séverine Saintier, Editors
Cambridge University Press 2013

Contributors

Roger Brownsword              David Campbell          Roger Halson              Hector MacQueen

Jean Braucher                    Chuck Knapp              Juliet Kostritsky           Peter Alces

Martin Hogg                       Djakhongir Saidov      Mel Kenny                   Richard Austen-Baker

T.T. Arvind                           Curtis Bridgeman       Tom Joo                      Nancy Kim

Zoe Ollerenshaw                James Devenney         David Capper             Larry A. DiMatteo

Séverine Saintier                 Qi Zhou


&


International Contr
acting:  Law & Practice
Third Edition
Larry A. DiMatteo, Author
Wolters/Kluwer 2013

In addition, we have the following new articles out in print:

Pile of BooksGeorge A. Bermann, Arbitration in the Roberts Supreme Court, 27 Am. U. Int'l L. Rev. 893 (2012)

Bernardo M. Cremades, Good Faith in International Arbitration. 27 Am. U. Int'l L. Rev. 761 (2012)

Yves Derains, The Arbitrator's Deliberation, 27 Am. U. Int'l L. Rev. 911 (2012)

Juan Fernandez-Armesto, Salient Issues of International Arbitration, 27 Am. U. Int'l L. Rev. 721 (2012)

Paul Friedland and Paul Brumpton, Rabid Redux: The Second Wave of Abusive ICSID Annulments, 27 Am. U. Int'l L. Rev. 727 (2012)

Judge Dominique Hascher, Independence and Impartiality of Arbitrators: 3 Issues, 27 Am. U. Int'l L. Rev. 789 (2012)

Pierre Mayer, The Extension of the Arbitration Clause to Non-Signatories -- The Irreconcilable Positions of French and English Courts, 27 Am. U. Int'l L. Rev. 831 (2012) 

William W. Park, The Politics of Class Action Arbitration: Jurisdictional Legitimacy and Vindication of Contract Rights. 27 Am. U. Int'l L. Rev. 837 (2012) 

Anjanette H. Raymond, It Is Time the Law Begins to Protect Consumers from Significantly One-Sided Arbitration Clauses within Contracts of Adhesion, 91 Neb. L. Rev. 666 (2013)

Jingzhou Tao, Salient Issues in Arbitration in China. 27 Am. U. Int'l L. Rev. 807 (2012)

Todd Weiler, Heather Bray and Devin Bray, Are United States courts receptive to international arbitration? 27 Am. U. Int'l L. Rev. 869 (2012)

[JT]

June 5, 2013 in Recent Scholarship | Permalink | TrackBack (0)

Tuesday, June 4, 2013

Weekly Top Tens from the Social Science Research Council

SSRNRECENT HITS (for all papers announced in the last 60 days) 
TOP 10 Papers for Journal of Contracts & Commercial Law eJournal 

April 4, 2013 to June 3, 2013

RankDownloadsPaper Title
1 206 Can an Arbitrator Conduct Independent Legal Research? If Not, Why Not? 
Paul Bennett Marrow
New York Law School
2 204 The Hague Principles on Choice of Law for International Contracts: Some Preliminary Comments 
Symeon C. Symeonides
Willamette University - College of Law
3 203 Private Equity Firms as Gatekeepers 
Elisabeth de Fontenay
Harvard Law School
4 200 Regulation Through Boilerplate: An Apologia 
Omri Ben-Shahar
University of Chicago Law School
5 128 Discretion 
D. Gordon SmithJordan C. Lee
Brigham Young University - J. Reuben Clark Law School , Brigham Young University - J. Reuben Clark Law School
6 114 Contract Law in Europe and the United States: Legal Unification in the Civil Law and the Common Law 
Hein D. Koetz
Max Planck Institute for Comparative and International Private Law
7 114 Preemption Without Borders: The Modern Conflation of Tort and Contract Liabilities 
Max N. Helveston
DePaul University - College of Law
8 110 Customary Law: An Introduction 
Lisa BernsteinFrancesco Parisi
University of Chicago Law School, University of Minnesota - Law School
9 108 Merchant Law in a Modern Economy 
Lisa Esther Bernstein
University of Chicago - Law School
10 107 On the Applicability of the Common European Sales Law to Some Models of Cloud Computing Services 
Chris ReedClarice CastroRuy de Queiroz
Universidade Federal de Pernambuco, Queen Mary University of London, School of Law, Centro de Informática - Univ Federal de Pernambuco

RECENT HITS (for all papers announced in the last 60 days) 
TOP 10 Papers for Journal of LSN: Contracts (Topic)  

April 5, 2013 to June 4, 2013

RankDownloadsPaper Title
1 205 The Hague Principles on Choice of Law for International Contracts: Some Preliminary Comments 
Symeon C. Symeonides
Willamette University - College of Law
2 202 Regulation Through Boilerplate: An Apologia 
Omri Ben-Shahar
University of Chicago Law School
3 131 Discretion 
D. Gordon SmithJordan C. Lee
Brigham Young University - J. Reuben Clark Law School , Brigham Young University - J. Reuben Clark Law School
4 116 Contract Law in Europe and the United States: Legal Unification in the Civil Law and the Common Law 
Hein D. Koetz
Max Planck Institute for Comparative and International Private Law
5 116 Preemption Without Borders: The Modern Conflation of Tort and Contract Liabilities 
Max N. Helveston
DePaul University - College of Law
6 107 Damages versus Specific Performance: Lessons from Commercial Contracts 
Theodore EisenbergGeoffrey P. Miller
Cornell University - Law School, New York University (NYU) - School of Law
7 107 On the Applicability of the Common European Sales Law to Some Models of Cloud Computing Services 
Chris ReedClarice CastroRuy de Queiroz
Universidade Federal de Pernambuco, Queen Mary University of London, School of Law, Centro de Informática - Univ Federal de Pernambuco
8 92 Lochner, Liberty of Contract and Paternalism: Revising the Revisionists? 
Harry G. Hutchison
George Mason University - School of Law
9 85 Arbitrating 'Arbitrability' 
Alan Scott Rau
University of Texas at Austin School of Law
10 78

Shame, Regret, and Contract Design 
Eric A. Zacks
Wayne State University Law School

 

[JT]

June 4, 2013 in Recent Scholarship | Permalink | TrackBack (0)

Nadvorney & Zalesne, Teaching to Every Student

Legal education is being transformed before our eyes.  In part, this transformation has been so gradual that it has gone unappreciated.  I routinely read critiques of legal education that seem to be based on the assumption that we all still teach like Professor Kingsfield.  I know of very few people who still use that sort of strict Socratic method.  Most doctrinal law teachers that I know teach through a mix of soft Socratic method, lecture, problems and discussion.  But a great deal of the curriculum at most law schools is now dedicated to skills training, externships, co-curricular activities (moot court competitions, trial advocacy, journals, etc.) and of course clinics.


NadvorneyIn the face of blistering criticism of legal education, law schools have been striving to demonstrate a commitment to reform, often by bolstering, highlighting or simply re-packaging existing programs.  But to the extent that real change is occurring, it is often based on our intuitions about what ought to work for our students rather than on actual evidence of what works.  As Holmes tells Watson, “It is a capital mistake to theorize before one has data.  Insensibly one begins to twist facts to suit theories, instead of theories to suit facts.”  But the partnership that produced Teaching to Every Student: Explicitly Integrating Skills and Theory into the Contracts Class bridges the gap between theory and facts.  Deborah Zalesne is a contracts scholar at CUNY law and David Nadvorney is the director of academic support programs at CUNY.   They have worked together for years to make certain that their pedagogical strategies actually work for their students

ZalesneIntroducing new approaches to the legal curriculum involves teaching old dogs new tricks, because law schools have to work with the faculties they’ve got.  I consider myself a moderately old dog.  I cannot easily abandon my doctrinal/theoretical approach to focus in my doctrinal courses on skills training and bar preparation.  I need guidance to help me work on my approach. Nadvorney and Zalesne provide such guidance for contracts profs in Teaching to Every Student. The book is slim and affordable (under $30 on Amazon), and I think its approach is unique – or at least highly unusual – in that the authors insist on incorporating theoretical perspectives while also highlighting their very practical, skills-based approach to teaching first-year contracts.

Their approach to teaching contracts focuses on three areas of training: academic training, which includes everything from case briefing to exam preparation; legal reasoning, which includes the traditional skills set that enables students to learn how to issue spot and apply rules to unique factual situations; and theoretical perspectives, which encompasses learning theory, identifying and critiquing theoretical approaches, and integrating such approaches into advocacy. 

The book can be a wonderful supplement to any casebook (or whatever other materials one chooses to use).  It comes complete with in-depth sections on each of the three areas of training mentioned above, exercises, sample syllabi and some edited cases. 

Even if one chooses not to adopt the book, I recommend it to law professors interested in looking for new stimuli that will enable them to shake up their approaches to teaching

[JT]

June 4, 2013 in Books, Commentary, Teaching | Permalink | Comments (0) | TrackBack (0)

Monday, June 3, 2013

Boilerplate Symposium Conclusion (for now): Peggy Radin Responds to Week Three

RadinAlthough this is the last official post in the our online symposium on Margaret Jane Radin's Boilerplate: The Fine Print, Vanishing Rights and the Rule of Law, I have heard from a few scholars who would like to weigh in, so there will likely be a few more posts on Boilerplate appearing over the summer.

In today's post, our author, Margeret Jane Radin, responds to her reviewers from the third week of the Symposium

Response to Aditi Bagchi:

You are quite right to say that what I was trying to do in my book is bring to the fore what you label features (2) and (3): that boilerplate in effect forces consumers to give up important legal rights and that boilerplate effectively eliminates rights for large portions of the consumer population.  These features cause an inquiry into what we might label (4) in my intentions in the book:  there are background rights that are constitutive of civil society, or inherent in the social contract, and these are not within the purview of individuals to waive, one by one, even if they truly wish to, one by one.  In writing this book, I did feel it was necessary to rehearse the role of consent (the basis of justification for enforcement of contracts) in the context of how badly this rationale fits mass-market boilerplate deployment, akin to your feature (1).  Unfortunately, it appears that some readers seize on this as the book's main point, and are quick to say that this observation is old hat.  What is not old hat, at any rate, is what follows:  much that is called contract today should not be called contract, and should not be enforced as contract.

BagchiAt least: We shouldn't be able to sell off certain rights, even if, as individuals, we want to.  (And it's quite possible that many of us, as individuals, want to, because we think we, as individuals, don't need them, and we don't, as individuals, find the needs of society as a whole to be salient for our decision making.)  We do need, now, to turn our attention to which rights these are, as indeed I believe you are saying.

You mention my copyright example: the purpose of rights that exist for the benefit of society as a whole is destroyed when individuals (in the millions) can waive them one by one.  The example I like to invoke is the right to be free of negligent harm inflicted by others.   As long as we believe that negligent harm-causing behavior is at least somewhat deterred by legal liability, tort law--even if flawed at present, and unless we replace it with some other legal regime--has to fill this role.  Service providers are the best party to hold responsibile for preventing harm to their customers:  they can investigate their employees, maintain their equipment, keep the premises sanitary, etc, etc, and their customers cannot.  If each of us has to be endlessly on guard against being harmed by others with whom we come into contact, we are back in the state of nature.

Response to BraucherJean Braucher:

As a powerful and learned voice in consumer protection legislation, you should, or I certainly hope you will, expand what you have written here into a book that can be both helpful for contracts scholars and teachers and a much wider audience.  I certainly agree that contracts teachers should make consumer regulation known to students; and they should also make it known that boilerplate doesn't fit into the offer/acceptance/consideration paradigm.

In writing Boilerplate, I was trying to gather together many strands of thought and argument about it, so as to provide a platform from which further thought could commence.  As I mentioned in another of these replies, I had to go through the idea of consent (promises, agreement) because that is the basis of contract justification; that is what is supposed to justify enforcing these things.  And courts do enforce them; as contracts.  Unfortunately, some readers may think I am over-preoccupied with consent.  But rather I am preoccupied with the tragedy that deletion of important rights is routinely being enforced against citizens in the name of contract.  So, before making other suggestions, I tried to detach these things from the honorary title of contract. 

I would be great if the FTC would declare many of the clauses to be unfair methods of doing business (especially wholesale remedy avoidance or deletion).  It would be great if Dodd-Frank is not gutted, and if the CPFB manages to do away with arbitration clauses against financial consumers.  It would be great if the Supreme Court would not make it difficult for states to implement their consumer protection regulation. It would be great if insurance regulators would prevent insurers from forcing their insureds to shunt risk to the insureds' customers.  I think you are perhaps more hopeful than I am at this point, but I'd like to be more hopeful.  It's good to keep on fighting, and trying to gather support. (See the review by Theresa Amato.) 

CallerosResponse to Charles Calleros:

I admire your sense of ethical obligation to educate both future lawyers and members of the general public about the features of citizenship.  Thank you.  I hope you will inspire us all.

 On the topic of reasonable expectations:  Although you clearly understand the problem caused by the normative/positive ambiguity, I am still very much concerned that many judges and other officials will just lapse into believing that the more something is prevalent the more we expect it, thus reinforcing "Everybody does it" as justification.  Whereas, of course, the more something unjust is being done, the worse is the injustice in society. 

Your solution to the "Everybody does it" justification would be comprehensive black listing of oppressive clauses on the European model.  I wish we could do this, but I'm a pragmatist, and I think we cannot (and it seems you agree).  So what might be possible for us?

You suggest that businesses should highlight potentially objectionable terms. Some businesses are already doing that. For example, there are now up-front solemn warnings about the presence of an arbitration clause. But I don't think that works either--consumers just sign or click "I agree" anyway--though we could use some empirical data on this.  And who gets to decide what is potentially objectionable?  Here you seem to come back to the idea of lying "outside the boundaries of what consumers should be held to reaonably expect," so we are back to the invitation to use the "Everybody does it" method of determing what is reasonably expectable.

LinzerResponse to Peter Linzer:

Thank you for reminding us of the historical progression, and the great quote from Cardozo.  Indeed, as you say, courts, legislatures, and agencies should look not to the mechanics of contract but rather to the rights of the social system.

Indeed, in addition to fussing with the mechanics of contract, we should think more about the rights that cannot be disclaimed by individuals. There are some rights that cannot be disclaimed by individuals even with true consent:  what rights are those?  I contend that at least the right to viable legal remedy is one. 

Response to Cheryl Preston: Preston 


I love the quote from Cole v. Goodwin

Is it a "stretch" to say that the democratic process has created protections that boilerplate deletes?  Copyright and class actions are examples where this is not a "stretch," I believe.  It is perhaps question-begging to say that after all, these are default rules; at least, I am trying to argue that they should not be, and that the judiciary could take some steps against too-easy waiver.


BUT it is certainly true that legislative bodies are "influenced" (i.e., bought)   "by the same business interests that control consumers by contract."  This is more true, I think, of federal than of state and local legislatures, perhaps because of the immense amount of money we allow to be spent in federal elections.  This is a sorry state for democracy.

The interesting thing about the copyright example is that the federal law was indeed written pretty much at the behest of the major business interests themselves.  So in this case it seems that what these interests "bought" was a coordination solution from which individual firms should be prevented from defecting.

To your last paragraph, I say "Hear, hear."  To your penultimate paragraph I say, let's support  Theresa Amato and her colleagues, and let's join the ALI and speak up.

RubResponse to Guy Rub:

Thank you for engaging with me on the topic of market solutions.  I meant my chapter 10 to be suggestive, hoping it might be helpful to get thought about this going. I appreciate your having given this matter some of your time and thought, and I hope this will encourage others.

The prior posts can be found here: 

 Thanks to all of our participants.  

[JT]

June 3, 2013 in Books, Commentary, Recent Scholarship | Permalink | Comments (0) | TrackBack (0)

Radin Meets Readers (and a Packed Audience) at Law & Society Annual Meeting

[Editor's note: We interrupt our Boilerplate Symposium to bring you this report from Shubhs Ghosh on another discussion of  Margaret Jane Radin's Boilerplate: The Fine Print, Vanishing Rights and the Rule of Law.

A panel of five contracts law scholars met to discuss Margaret Radin’s Boilerplate in front of an  audience of over thirty attendees at the annual Law & Society meeting in Boston on Saturday, June 1, 2013.  Tal Kastner of Princeton University did a great job moderating and raising a provocative discussion. Although scheduled to end at 6:15 pm, the attendees stayed until almost 7 pm.  What follows is a brief write-up of the discussion with my own comments interspersed.

MacaulayThe readers included Stewart Macaulay, David Campbell, Aditi Bagchi, Peter Benson, and Guy Rub, speaking in that order.  Stewart was positive about the book and began his comments with a reminder of the anti-lawsuit attitude given voice in tort reform. The restrictions on rights that occur through boilerplate, he suggested, is a further reflection of this attitude as boilerplate drafters limit remedies and rights of consumers and their access to courts.  As Stewart put it, advocates of court reform complain about money-chasing tort and class action attorneys but there is no mention of how much corporate lawyers make in drafting rights-limiting boilerplate clauses. Stewart ended his comments with skepticism about Radin’s proposals for top down reform from the legislature, whether federal or state.

Campbell-davidDavid Campbell was more critical of the book, especially what he described as Radin’s idealized portrait of the contract bargain.  Not all terms are always deliberated by the parties, but nonetheless contract terms can be read into the contract by courts.  He was particularly skeptical that the solution lay outside contract.  Properly applied, doctrines like formation, unconscionability and other contract terms can limit the negative applications of boilerplate.  Unfortunately, some courts in the United States have not been enforcing the existing  law in a reasonable manner.

BagchiAditi Bagchi emphasized Radin’s theme of democratic degradation, boilerplate’s role in limiting  key rights of citizenship through terms that remove rights of access to courts and compensation for injury. Although Aditi was less concerned with loss of procedural rights (such as class actions), she agreed that boilerplate terms should receive greater scrutiny when they involve limitations on compensation for personal injuries. Introducing the concept of a social wage, Aditi made the point that liberal society extols contractual freedom as part of a broader array of rights delineated in tort, property and other regimes.  What society deems to be waivable through contract rests on choices regarding what should be allocated through markets and what should be allocated through political processes. Boilerplate allows a shift of these choices without democratic deliberation.  The market de facto and de jure determines individual rights.

BensonPeter Benson elaborated on some of the critical points raised by David Campbell.  Introducing a comparative perspective from Canada and the EU, where boilerplate terms are regulated, Peter emphasized doctrines within the United States that could also serve to limit the imposition of noxious terms through boilerplate. The challenge Peter posed is identifying a legal standard for what terms would be deemed noxious, or troublesome.  Commenting on Radin’s development of such standards subsequent to the publication of her book, Peter questioned whether such standards would be workable.  He described them as highly manipulable and indeterminate.

RubGuy Rub ended the formal comments with criticisms of Radin’s proposed market-based and state-based solutions. Disclosure-type solutions would not work even if disclosures were simplified and coded so that they could be readily digested. Consumers either would tune such information out or would be willing to trade off unfavorable terms for a lower price.  Similarly, any legislative solution would be subject to the same capture that gave rise to boilerplate.  Guy provided the example of federal legislation on arbitration as an example. Guy did suggest grass roots-like solutions involving activism through exposure of noxious terms through social media and blogs. Such activism could be more effective, he suggested, than top-down regulation.

RadinThe interactions continued with Peggy’s responses.  She took issue with some broad characterizations of her book, particularly her view of an idealized contract. Her concern is with overreaching by business entities in drafting terms that severely limit the rights of consumers.  As she pointed out, she never said that no rights can be waived or limited.  But some companies go too far in limiting their liability in the daycare and elder care contexts. Such noxious terms, she suggested, may have more to do with insurance companies than with the actual service providers.  Nonetheless, the market dynamics lead to a market failure that occurs through boilerplate terms that severely shift risks to consumers in market transactions. The world does not have to be that way.  Drawing a connection with her work on market inalienability, Peggy argued that boilerplate forces consumers to alienate fundamental attributes of citizenship through take it or leave it offers. Sympathetic to the comments on her proposed solutions, she tantalizingly suggested that a possible solution would be a return to an earlier common law of contract that existed before the law took a pro-business turn.  She appealed to an older generation of common law judges to offer a correction to this turn.  I wondered whether such judges actually exist anymore.

Discussion afterward was lively.  Tal Kastner emphasized points about democratic degradation and the decline of communication and deliberation.  Richard Lempert pointed out the betrayal of trust that occurs with boilerplate as consumers are invited to trust companies through the signing of boilerplate terms that are designed to “screw consumers.”  Richard suggested that government may be trustworthy than private businesses, contrary to contemporary rhetoric.  Amy Kastely raised a point about the drafting of the Restatement on Consumer Contracts that might exacerbate the problems with boilerplate. Robert Gordon questioned whether boilerplate should even be referred to as private ordering since it represented the imposition of terms by dominant players backed up by the sanctioning power of the state. Other points (which I could not attribute) were made about the regulatory approach to standard terms in the Netherlands and the possibilities of consumer activism to expose consumer-unfriendly terms that prominent companies impose through boilerplate.

GhoshThe Author Meets Reader panel was a stimulating event.  My own thoughts are that in some instances boilerplate in contract is used to realign the rights of consumers without having to engage in the democratic process.  The consumer rights that companies may want to delimit could be imposed through legislation.  In many instances, such legislative efforts would fail.  Boilerplate provides a way to impose a change in underlying entitlements without having to engage the political process.  In such situations, there is a real threat to the democratic process as market processes dominate.

The discussion of private power, public power, and individual rights made me think of Shelly v. Kramer, the landmark case in which judicial enforcement of racially restrictive covenants were deemed to be state action for the purposes of the Equal Protection Clause. If boilerplate is substituting for legislation, then perhaps noxious terms should be the basis for a due process or other constitutional violation.  I raise this point to highlight the underlying issues as well as to pinpoint solutions.  No court would be likely to adopt such a broad reading of Shelly v Kramer, a case that has already been limited to its narrow facts. But where constitutional efforts invariably fail activism on the legislative and through market pressure serve as more effective alternatives.  Margaret Jane Radin’s Boilerplate is a great book about legal reform in a world where contracts and market processes have been used to displace democratic deliberation and legislation. 

[Posted, on Shubha Ghosh's behalf, by JT]

June 3, 2013 in Books, Commentary, Conferences, Recent Scholarship | Permalink | Comments (0) | TrackBack (0)