Synopsis of Radin’s Argument
Chapter One: An Overview of Worlds A and B
The chapter identifies with a certain time when contract referred to a bargained-for exchange transaction between two parties who consent to the exchange. That is the ideal of a contract, and it exists in World A, which is imagined to be the world of voluntary agreement. A contract should involve the consent of each party with both having to give up something of value to obtain something else of value. After such an exchange has taken place, then each party should deliver on their obligations failure to which they face legal action. There is a viable avenue for redress of grievances in courts, which is the arm of the state that enforces contracts to ensure individuals establish confidence when dealing with one another. However, contacts today are marred with issues that tend to lead to the vanishing of the right to jury trial due to boilerplates.
There are cases where defendants tend to bring lawsuits against corporations that use paperwork to shunt them to arbitration. These corporations essentially cancel the victim’s right to a trial by a jury even in cases where claimants have not been informed of the possibility of this happening. In fact, most people do not know what arbitration is and the fact that their jury trial is fragile. When such corporations are taken to court, it is common to find dismissals based on paperwork that shunts those with grievances to arbitrators. Such dismissals are not good since they encourage business firms to use terms that are only favorable to them and include an arbitration clause that protects their economic interests only.
Corporations are constantly finding ways of making redress for their actions widely remote. The legislature provides for class action since it intends for people within its jurisdiction to have an opportunity to seek a remedy when harm is inflicted on them. Furthermore, class actions are designed to deter corporations from reaping enormous profits by unjustly extracting small excesses from a large number of customers. Apart from the arbitration clause, corporations tend to deny a remedy to injured parties by limiting the litigants to taking suit in a jurisdiction that is far away. Another form is the escape from fault clause where legal rights of the injured party that would otherwise be held are waived thus exculpating the corporation from its fault. It is worse than an arbitration clause because it deprives the injured party of all remedies. Many individuals injured through the fault of businesses they deal with tend to be barred by the corporation’s paperwork from holding the corporation legally accountable unless there are special circumstances that can convince the court that the case is unique.
Common components of alternative legal universes that are created by firms include an arbitration clause, choice of law clauses, and the exculpatory clauses. However, there are other forms in which fine print deletes the legal rights of recipients. One general provision used is one that limits the remedies for losses that have been caused by a product that is defective. Essentially these fine prints eliminate damages for injuries that are a consequence of the failure of a product. Most US consumers enter into such contracts without knowledge of the paperwork thus such contracts belong to World B and are termed as boilerplates.
The law considers boilerplates to be a method used in contract formation and they are expansively in World B as purported contracts that neither look nor act like those of World A. There are a variety of purported contracts in World B key among them being standardized adhesion contracts, offsite terms, “shrink-wrap licenses”, rolling contracts, and unwitting contracts. Standardized adhesion contracts are contracts of adhesion that dictate that one can only get the service if he or she agree to the terms example being the parking lot ticket. Offsite terms refer to terms that are often part of standardized adhesion contracts but are not stated in the document that is visible example being the airline ticket. “Shrink-wrap licenses” originated with the shrink-wrapped commercial software product where if you break the wrapper then you are bound to the terms printed below it. Rolling contracts refer to the concept of money now and terms later where, for instance, one gets an insurance contract and sign it but read the terms later. Finally, there is the unwitting contract that is mostly used in websites where boilerplates are placed on a link that most people never read.
Most corporate enterprises use boilerplates frequently, but people do not read them because they do not understand the terms and there simply is no supplier who does not impose onerous clauses. The law holds that a contract is formed when a boilerplate recipient and a firm enter into an agreement. In World A, voluntary exchanges are greatly revered but in World B this theory is not considered, and most people are surprised that boilerplates are treated as contracts. The book seeks to analyze whether boilerplates should be regarded as contractual and normative and demographic degradation are analyzed in subsequent chapters to discuss the issue of consent or agreement.
Chapter Two: Normative Degradation
Normative degradation means that rights have been deleted without the consent of individuals in the name of contract. Freedom of contract is an essential value, and the involuntary contract is a contradiction to law and rather paradoxical. The legal system is suffering from widespread normative degradation since the purported contracts of World B that are enforceable in the US cannot be justified by the traditional justification for contract enforcement. Consent is not the only requirement needed for a contractual obligation to be enforceable, but it is among the key ones. The chapter explains the concept of consent and how it functions in contractual obligation. It further looks at how the protagonists of World B tend to utilize procedures and contractual attempt to justify contractual consent.
Consent is primarily viewed as positively consisting of specific words or even actions of a person and not negatively as a lack of action or even silence. A system of contract that is based on consent must also be based on non-consent. There must be rules and principles that the court can use to decide the category to which a purported contract belongs as regards to consent and non-consent. The first variety of non-consent is coercion and the allied conceptions of duress and force. In some legal doctrines, the definition is expanded to encompass oppression, undue influence, duress, and even unconscionability. The second example of the varieties of non-consent is the fraud that is allied with conceptions of deception and misrepresentation. In other legal doctrines, this concept is expanded into more areas that can be contested which include failure to disclose, bad faith, and mistake. These doctrines are essential in contract law as they delimit the interactions that might be considered as valid contracts. A third variety of non-consent is sheer ignorance where a person’s entitlement is being divested without the prerequisite knowledge of the individual. A subset of purported contracts that are represented by boilerplates belong to the category of sheer ignorance since receptionists of boilerplates do not know of their existence and can therefore not tell the divestment of significant legal rights.
There exists a contract rule that holds that silence cannot be consent except when there are particular circumstances that warrant silence being a form of acceptance. Consent can be problematic in many fields of law essentially, when consent depends on the processes that are internal to a person but observable by others who are not entirely aware of the processes involved. Furthermore, the expression of consent can involve conventional behavioral signals that are embedded in culture such as the nodding of the head, and these cues are not infrequently contested. Consent is often absent in many instances especially when the deployment of boilerplate results in situations of sheer ignorance for recipients. However, boilerplates can also give rise to situations of problematic consent as for instance when recipients click “I agree” to terms that that are presented online without even reading them. In such a case, consent can be contested but often the firm has information asymmetry, which means that they have a thorough understanding of the terms of the boilerplate as compared to the consumer. Many pupated contracts contain languages such as “waiver of consequential damages”, or “waiver of moral rights” that have legal meanings that are quite opaque to nonlawyers. There is also the issue of heuristic bias where psychological research has determined that human beings have the tendency to reason and choose for themselves in ways that are not entirely rational. People are not upright at assessing risk, and they tend to stay with the status quo when making decisions that are particular to surrounding circumstances salient to them and ignoring those that are more pertinent. Heuristic bias, also known as bounded rationality, relevant in World B is the psychological phenomenon of “framing” where the choices of people depend on a quantity of “anchor point” and the quantity changes then so does the preference. The resolution of whether to buy a product that comes with a boilerplate is not normally anchored on what is on the boilerplate but rather framed by what other products are on offer. The pervasive effects of heuristic bias are very difficult to escape, and if people understand them, then they tend to render consent problematic.
There is a need to bring the boilerplate, which is World B to the parameters of a valid contract by extending the parameters of valid contracts also to cover adhesion contracts. The strategies for fitting World B into the paradigm of World A can be seen as a process of the voluntary transfer by agreement. World B has a notion that somehow amounts to consent to particular terms that is very problematic. There is a need for rearrangement of entitlements without any actual assent since recipients have a right to expect justice even in an unjust system. The system of contract law in which consent is essential is being degraded by boilerplate that erases important legal rights, and this needs to be checked on to guarantee both parties their freedom and rights in a contractual agreement.
Chapter Three: Democratic Degradation
Mass-market boilerplate rights deletion schemes that rework a system of recipients’ rights guaranteed by the polity to divest them of those rights for the benefit of the firm can engage in democratic degradation especially if the boilerplate comes into widespread use. Widespread use of boilerplates undermines the rationale that justifies the power of the state, the rule of law, and essentially converts rights that have been enacted and guaranteed by the state to those that can be condemned by private firms. Ironically though is that the state is enlisted to enforce purported contracts that seem to undercut rights that have been supposedly guaranteed by the state thereby undermining its authority and the basis of the law of contract. There needs to be a clear peculiarity between private law and public law as regards to the law of contract.
The theory of private ordering presupposes the existence of distinct and permanent entitlements that are underwritten by the state and belong to individuals and can be detached and exchanged. Private law essentially consists of legal rules of contract and property that regulate private exchanges and keeps them within bounds of freedoms of the parties involved. The system of private ordering is a treasured centerpiece of liberal political thought, and traditional liberal understanding of liberty of contract portrays the individual liberty as effectuated by voluntary agreements. Enforcement of contracts is a responsibility of the state, and they hold the power to enforce contracts that appear to uphold and instantiate the ideal of freedom of contract and the reality of public ordering.
Mass-market form contracts can amount to boilerplate rights that undermine the distinction between public and private ordering. The exchanges due to private ordering are only legitimate within a polity that denies enforcement to contracts that lack consent, or are obtained by fraud or force. Excessive privatization of legal infrastructure of contracts undermines the possibility of private ordering as envisioned by liberalism. Firms that use boilerplates to erase legal rights that make contractual private ordering possible are destroying the basis of the contract. Property and contract are the legal infrastructure of private ordering and they stem from the public realm of the polity. The state should enforce private ordering by following liberal ideals of the rule of law so as to keep transactions within bounds of free exchange. Furthermore, they have to put in place public oversight to act as a deterrent against players who might intend to transgress. People should be governed by the rule of law that is central to the liberal political thought and grants the state the monopoly on the use of force. The ideal of the rule of law has been utilized effectively to urge the reforms of property and contract in developing countries to ensure they function as free markets. Legal directives governing exist in advance of the conduct they are to regulate, and they have to be knowable, not impossible to follow, and equitably and impartially enforceable.
Boilerplate rights have deletion schemes that undermine the tedious and lengthy process of political debate and procedures by simply structuring their terms and conditions. They essentially make a sham of the apparatus of democratic governance when they indulge in divesting recipients of entitlements arrived at with many compromises, difficulty, and debate. There is a need for an exit from such boilerplates, but this is nearly impossible due to heuristic biases and market structural reasons like one sole supplier of a product. Another scenario that makes exit impossible is when there is a copycat boilerplate due to all providers of a product using the same boilerplate. The only way to remedy the situation would be to have a system with a decent set of terms that consumers can understand and have a normative acceptability of the terms and standards that either came from “bottom-up” market forces or even through “top-down” legislation.
The advent of Technological Protection Measures (TPM) is a threat to legal infrastructure since they are meant to replace boilerplates by enlarging the realm of self-help essentially replacing the legal infrastructure of enforcement and oversight. TPMs essentially institute a form of machine rule where they bypass the nation’s legal infrastructure of exchange and automatically not turn disputes over for adjudication. Furthermore, TPMs encourage self-help, which has a complex relationship with the legal system and can degenerate into vigilante justice that departs from the rule of law. The widespread, unchecked use of TPMs bypasses the public character of contract law and can go further than mass-market boilerplate rights in undermining the public legal infrastructure that essentially supports and justifies the realm of private ordering. There is a need to bring both TPMs and boilerplate within the rule of law so as to ensure that state authority is not overridden, and the rule of law is adhered to.