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Friday, February 28, 2014

Nutrition Labels and Wrap Contracts

The Food and Drug Administration proposed big changes to nutrition labels on food packages.  These changes would include putting calorie counts in large type.  The serving sizes would also reflect typical serving sizes (meaning they will be bigger).  The purpose of the redesign is to make certain information salient and to increase comprehension.  Will it do so?  There's evidence that lots of people already read nutrition labels (although apparently a lot of commenters at the NYT blog here don't). The redesign is intended to make it easier for those who already read labels to find the information they want (such as calorie count).  What's interesting is that the goal here wasn't to improve reading of the labels - it was to make finding the information and understanding it easier for those who were already interested.

What does the revised nutrition label  have to do with wrap contracts? Wrap contracts (browsewraps, clickwraps) are basically notices.  Like nutrition labels, you take them or leave them.  Will making information more salient increase reading?  It has to - in other words, certain information (such as calorie count) can't be missed.  But the goal isn't to increase reading.  It's to increase awareness of certain information.  By increasing awareness, the labels may encourage consumers who may not otherwise have cared, to pay attention to what's on the labels.  But more importantly, it makes it harder for companies to get away with selling foods with excessive calories to unsuspecting consumers.  For those suspecting consumers (those who know and don't care about calorie count), it does nothing and it's not intended to affect them.  Furthermore, it may provide some marketplace incentives for companies to adjust their ingredients.  As the NYT article notes, when the category for trans fats was added in 2006, it both raised consumer awareness and resulted in companies reducing or eliminating the ingredient from their food. 

Wrap contracts, like nutrition labels, contain information that people care about but often can't find.  It's clear, for example, that most people are starting to care about their online privacy.  Privacy is the "calories" information.  But it' s not easy to find out how companies are using personal information.  Online privacy policies are densely written and typically hard to find, requiring several "clicks" to access.  Why not have some "labeling" requirements for wrap contracts?  It's high time that they had some sort of a redesign since consumers aren't reading them.  I know many think disclosure requirements are a lost cause, but I'm not one of them.  Naysayers always protest that consumers don't read terms, but that's because they're unreadable.  Would requiring that terms be both salient and concise increase reading of terms?  I think increasing reading as a goal is desirable but shouldn't be framed as the objective.  The objective should be to increase the salience (prominence) of certain information.  Increasing the prominence makes the information more relevant.  This may ultimately increase reading, but that's not the goal (at least in my view).  The goal is to heighten awareness of terms - that's different from encouraging consumers to read (which, given the state of contracts, is not efficient...)  But in order for disclosure to work it has to be accompanied by redesign.  The visual has to draw attention to the textul.   Like nutrition labels, a redesign of wrap contracts is long overdue.

Some may say the new labeling won't work.  The reason I think it will have a positive effect?  Some food companies are already protesting.  As my favorite nutritionist Marion Nestle (who likes the new labeling) said, the new labeling will be "wildly controversial."  Nobody likes to draw attention to their flaws.  Food companies are no exception.

 

 

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