What if Producers Paid Us to Read Fine Print?

Daniel Barnhizer

One of my favorite cases from the perspective of consumer bargaining power is Boucher v. Riner,¹ which involved both my third-greatest physical fear (jumping out of a perfectly good flying airplane a few thousand feet above the ground) and my first-greatest jurisprudential concept (what is ‘assent,’ really, in the context of consumer contracts). The case involved a contract between a consumer who for some reason wanted to jump out of a perfectly good airplane in flight…because reasons, and a producer who apparently really believed in providing consumers with meaningful choices in a standard-form contracting paradigm.

Specifically, the standard-form contract in Boucher provided the consumer with two options regarding exculpation of the people who were offering the consumer the opportunity to jump out of that perfectly good airplane – (1) pay the standard base price and release the producer from liability for its own negligence or (2) pay an additional $300 (presumably with which the producer would purchase insurance against personal injury) and retain the right to sue the producer for injuries resulting from the producer’s negligence. Notably, the standard form contract presented these options in menu form, and the consumer was free to choose either option. The Boucher case is important because of the efforts of the producer to make the options regarding the exculpatory clause salient for the consumer. Nothing makes things salient like paying money for a choice.

Prof. Williams’ article takes this concept further with a nuanced analysis of the normative need for selective assent² in consumer contracts as well as examining possible regulatory responses for “market testing” boilerplate clauses. Specifically, the Boucher case epitomizes the ideal situation proposed by Prof. Williams, namely that producers should make boilerplate terms in standardized consumer contracts with consumers salient in a manner that would allow the market to accurately price those terms. While this thought experiment has been attempted in the past,³ Prof. Williams examines the economic, legal, and regulatory realities of such attempts at pricing selective assent to standard terms at a sophisticated level that recognizes both the potential benefits and pitfalls involved.

Beginning with the observation that consumers virtually never read the boilerplate terms in standard form because those terms are not salient to the consumer, Prof. Williams argues in favor of a regulatory scheme under the Federal Trade Commission that would identify potentially problematic contract terms and require producers to give consumers the opportunity to opt-out of those terms for a price. (P. 232.)Specifically, Prof. Williams identifies four categories of contract terms that are potentially problematic from a consumer perspective: (1) “terms that seek to alter the operation of the legal system and the rights it usually provides consumers”; (2) “terms that allow the business to change the terms of the contract at any time, without the specific consent of the consumer”; (3) terms imposing unexpected costs on the consumer; and (4) “terms that purport to limit personal liberties in unexpected ways.” (P. 247.) Prof. Williams’ categories cover what I would consider to be the usual suspects in any lineup of arguably anti-consumer terms.

However, it must be stressed that the article only identifies these terms as potentially problematic. Instead of arguing that such terms should be banned outright, Prof. Williams notes that many contracting platforms such as airline travel websites, Amazon.com, and Walmart have already implemented “choice infrastructure” that allows customers to “customize their experience, choosing different elements of a product or service, seeing the individual price of each element, and arriving at a total package and price that fits the consumer’s budget.” (Pp. 258-60.) Under Prof. Williams’ proposal, FTC regulation of the four categories of problematic terms would require producers wishing to include such terms in their contracts to implement their own choice infrastructure that would permit the consumer to accept the producer’s base (presumably lower) price for a contract containing those terms or opt out of those terms for an increased contract price.

Such a regulatory scheme would require significant adjustments in contracting behavior by producers. Notably, Prof. Williams admits that the FTC would have to engage in some policing of the prices producers attach to each opt-out option “so that firms do not use pricing to unduly discourage consumers from opting out.” (P. 236.) I believe such regulatory policing of prices for individual contract terms is the most significant challenge to Prof. Williams’ proposal. Among other reasons, government agencies such as the FTC lack sufficient information regarding the potentially millions of different standard form contract terms as well as market information that would be necessary to both set a price for each term and permit timely adjustments to those prices with changes in market conditions. Prof. Williams recognizes this concern and suggests initially that producers should initially offer the opt-out options without prices and “wrap the expected cost of consumer opt-out into their total price….” (P. 266.) By identifying the terms consumers consistently accept or reject, producers could then develop information regarding pricing those terms or even whether to keep them at all.

Overall, this article makes an important contribution to the literature regarding consumer assent to standard form contract terms. Menu pricing of contract terms is theoretically easy in an online context, and yet, other than in rare cases like Boucher, it is unusual to see producers providing options to opt out of boilerplate terms. Such options, however, could yield valuable price information regarding the benefits or drawbacks of specific standard terms within a competitive market while at the same time providing consumers with the ability to customize their contract obligations. Although Prof. Williams’ proposal would likely be costly to implement in its initial stages, it suggests a potential solution to the difficult problem of consumer assent to non-salient terms in standard-form contracts.

1. 514 A.2d 485 (Md. Ct. Spec. App., 1986) (Boucher), abrogated on other grounds, Wolf v. Ford, 644 A.2d 522 (Md. 1994) (adopting a totality of the circumstances test for determining whether exculpatory agreements affect a public interest and rejecting the six-factor test of Tunkl v. Regents of the Univ. of Calif., 383 P.2d 441 (Cal. 1963)).
2. See Daniel D. Barnhizer, Reassessing Assent-based Critiques of Adhesion Contracts, in Comparative Contract Law 170, 177-183 (Larry A. DiMatteo & Martin Hogg eds., 2016) (analyzing the concepts of selective and particularized assent in consumer contracts).
3. See, e.g., Margaret Jane Radin, Humans, Computers, and Binding Commitment, 75 Ind. L.J. 1125, 1150-51).