A Terrific Conference and a Terrific Talk

by Jeff Sovern

I've spent the last few days at a terrific International Association of Consumer Law conference at the of Indiana University's Robert H. McKinney Law School (my second great conference in five months, the other being Ted Mermin's Berkeley Consumer Law Scholars Conference). Indiana's James Nehf clearly had worked very hard to put on the conference.  The IACL brings together consumer law scholars from all over the world every other year so this was an opportunity to hear how other countries solve the same kinds of problems we have while at the same time getting helpful comments on our own work.  One lesson from the conference is that other countries are also struggling with the challenges of how to regulate electronic commerce.

I will probably have more to say about the conference in future posts but I wanted to say something in this post about the talk Shmuel ("Samuel") I. Becher of Victoria University of Wellington in New Zeeland gave about a paper he co-authored with Uri Benoliel of Ramat Gan Law School, The Duty to Read the Unreadable, 60 Boston College Law Review (Forthcoming).

One of the useful things about conferences is that they allow you to hear a brief talk about a paper the significance of which you might have overlooked. I had previously posted the article's abstract to the blog (I'll paste it in again below), but I hadn't read it, a mistake I will now correct.  The article surveys many online wrap contracts and finds that they are beyond the reading level of many consumers.  This doesn't seem unusual; according to the CFPB, the average credit card contract requires a reading level well into eleventh grade while credit card arbitration clauses are on average at a reading level of someone who has nearly completed college. Yet, the paper points out, courts hold consumers to a duty to read these contracts–even though many consumers can't.  That hardly seems either fair or consistent.  The paper argues that policy-makers should oblige consumer contract drafters to write contracts that consumers should be able to understand. Indeed, if policy-makers do not impose such a duty, contract drafters have an incentive to make the contracts unreadable so they can impose their terms on consumers but consumers can't read them and so won't shop elsewhere (though perhaps that incentive is reduced slightly by the unlikely possibility of an unconscionabilty defense). If only courts would say that unreadable contracts are likewise unenforceable.

There were other excellent talks but many were about papers that have not yet been published or posted on the web, and I won't discuss those until they are.

Anyway, here's the abstract:

The duty to read doctrine is a well-recognized building block of U.S. contract law. Under this doctrine, contracting parties are held responsible for the written terms of their contract, whether or not they actually read them. The application of the duty to read is especially interesting in the context of consumer contracts, which consumers generally do not read. 

Under U.S. law, courts routinely impose this doctrine on consumers. However, the application of this doctrine to consumer contracts is unilateral. While consumers are expected and presumed to read their contracts, suppliers are generally not required to offer readable contracts. This asymmetry creates a serious public policy challenge. Put simply, consumers might be expected to read contracts that are, in fact, rather unreadable. This, in turn, undermines market efficiency and raises fairness concerns. 

Many scholars have suggested that consumer contracts are indeed written in a way that dissuades consumers from reading them. This Article aims to empirically test whether this concern is justified. The Article focuses on the readability of an important and prevalent type of consumer agreement: the sign-in-wrap contract. Such contracts, which have already been the focal point of many legal battles, are routinely accepted by consumers when signing up for popular websites such as Facebook, Amazon, Uber, and Airbnb. 

The Article applies well-established linguistic readability tests to the 500 most popular websites in the U.S. that use sign-in-wrap agreements. The results of this Article indicate, inter alia, that the average readability level of these agreements is comparable to the usual score of articles in academic journals, which typically do not target the general public. These disturbing empirical findings hence have significant implications on the design of consumer contract law.