Much of contract law—including the doctrines pertaining to contract formation and to defects in the contracting process (such as mistake and duress)—revolves around the question of whether the parties have expressed a valid will or consent. Drawing the line between valid and invalid consent preoccupies other spheres of law as well, such as tort law (for example, in the context of consent to a medical treatment) and criminal law (e.g., the distinction between voluntary sex and rape).
In contract law, special challenges are posed by the fact that nowadays the great majority of contracts (some would say 95% to 99% of the written contracts) are made through standard forms, where one party—be it a consumer or a commercial customer—does not meaningfully participate in setting the terms of the transaction. In fact, practically no one reads the terms of the standard forms before expressing his or her consent. This is true not only when signing a form in a bank or a store (where reading the contract before signing it may upset the people waiting in line), but also when contracting online in the comfort of one’s home or office (Bakos, Marotta-Wurgler and Trossen 2014). Not only people do not actually read contracts before signing or clicking their consent; even if they wanted to, there is practically no way they could read all the contracts and other types of information they are constantly bombarded with by commercial firms, governmental agencies, and other institutions (Ben-Shahar and Schneider 2014).
How can legal policymakers, including courts, hold that people consent to terms that they do not (and practically cannot) read before making the contract? Joanna Demaree-Cotton and Roseanna Sommers’ experimental study in Autonomy and the Folk Concept of Valid Consent may provide an interesting answer to this lingering question. The authors distinguish between people’s capacity to make free and autonomous decisions, and the exercise of this capacity. Even when people have the capacity to rationally make a decision that reflects their true will, they do not always use this capacity. Should a consent given by a person who has the capacity to make a free and autonomous decision be considered valid, or should it be considered valid only if the person has actually exercised that capacity?
The authors study this question in the contexts of consent to sex, to medical treatment and to police’s entrance into and search of one’s home. They compare people’s judgments of the validity of consent when it is given by (1) a person who is able to make a free and autonomous decision and actually makes such a decision, (2) a person who can make such a decision but does not use the capacity to do so, and (3) a person who is unable to make free and autonomous decisions. More specifically, in Study 2 reported in the article, the second condition (being able to make a free and rational decision, but not exercising this ability) includes cases in which the decision to undergo an elective surgery is made (1) out of impulse, (2) due to peer pressure, (3) without the relevant information, or (4) based on a superstition.
Without going into details, the main result of the studies reported in the article is that people judge a consent given by a person who is capable of making free and rational decisions as valid, whether or not he or she has exercised this capacity for any reason (people are considerably less inclined to view consent given by a person who lacks the necessary capacity as valid).
Since the results were found in three different contexts and in more than one experiment, they appear to be quite robust. However, as is always the case with experimental studies, one may raise questions about the generality and external validity of the findings, and one may wish to see replications of the same results. Particular caution is necessary when extrapolating from the contexts studied by the authors to other contexts, such as “the no-reading problem” (Ayres and Schwartz 2014) in contract formation. Nevertheless, I suggest that these findings can shed light on the notion of consent in contracting, as well.
Demaree-Cotton and Sommers’ intriguing findings explain how courts and other legal policymakers can hold people who could in theory read standard-form contracts bound by their terms, even though it is crystal clear that they did not actually read them and could not reasonably be expected to do so (they do not explain the rulings that people are bound by contractual terms that they could not possibly see before expressing their consent, as in ProCD, Inc. v. Zeidenberg, 86 F.3d 1447 (7th Cir. 1996), but for many, such rulings are indeed perplexing).
To be sure, psychological findings do not carry direct normative implications. When moving to the normative sphere, comparative law teaches us that framing the issue as a dichotomous choice between determining that people are bound by the terms of contracts they hardly ever read, and holding that they are not subject to those terms, is false. Most legal systems, at least in the Western world, opt for a third option: Standard-form contracts are generally enforceable, but many of their terms are not. Many legal systems provide for “black lists” of one-sided and unfair contract terms that are deemed invalid in standard-form contracts, and “gray lists” of unduly disadvantageous terms that are presumed invalid unless a court or an administrative agency sanction them. Comparable proposals have been made in the United States, as well (see, for example, Rakoff 1983). The lack of statutory regulation of standard-form contracts and the relative dearth of mandatory rules in contract law more generally, in US law (Zamir and Ayres 2020) is exceptional. Interestingly, it appears that this exceptionalism does not reflect the prevailing attitudes of the American population, which actually supports mandatory rules in contractual contexts (Katz and Zamir 2021). But this is another story.
In ProCD, warnings were provided on the box containing the software (admittedly in a tiny font) but they also splashed on Zeidenberg’s screen before he used the software. How is that a situation in which he could not have seen the terms before he consented?
Jeremy’s point is an interesting one. In both ProCD and Hill v. Gateway, Easterbrook mentions that the consumer had some reason to know that terms would be in the box. In ProCD Easterbrook mentions the small print and in Hill he emphasizes that the ad mentioned a limited warranty.
But these forms of notice are thin. Small print on a box would not, for example, insulate a company against an otherwise misleading ad. (See the recent Barilla Pasta decision in California.) Why should it be enough to inform a consumer of terms in the box? Maybe the screen splash was essential in ProCD. But there’s no screen splash in Hill v. Gateway. Just an ad mentioning warranties and lifetime support. That notice requires the consumer to do a lot of reasoning to know that the box might contain an arbitration clause.
Second, there’s a gulf between assenting to terms that are available, and assenting to whatever terms the seller chooses to put in the box. Easterbrook suggests consumers could ask for the terms in advance, including under Magnusson-Moss. But he doesn’t identify any mechanisms for doing that, or evidence that the sellers would have provided them.
I think Demaree-Cotton and Sommers’ thesis helps explain Easterbrook’s rhetorical move (aka slight of hand). He is trying to get these cases into the frame they identify: capacity for consent, even if not actual (informed) consent. But I’m with what I take to be Eyal’s point: the move is purely rhetorical. Easterbrook has not shown that in fact these consumers had or even should have had the information necessary to know that they were consenting to terms or that they had meaningful access to those terms. The capacity for informed consent here is science fiction. But the rhetoric works — again for reasons Demaree-Cotton and Sommers’ work perhaps explains.
Last thought: The internet has changed all this. Now it’s easy to give terms in advance that no one will read, rather than notice of terms no one will ask to see.