Shmuel I. Becher of Victoria University of Wellington, Yuval Feldman of Bar-Ilan University, and Meirav Furth of UCLA have written Seductive Oral Deals. Here's the abstract:
Legal scholars have devoted considerable attention to contractual design that exploits consumers’ vulnerabilities (“the paper deal”). For example, scholars have cautioned against the inclusion of one-sided, exploitative, or unenforceable terms in standard form contracts, and proposed solutions to address these problems. However, scant attention has been given to the role of pre-contractual promises that are disclaimed or qualified in the fine print (“the oral deal”).
This Article uncovers the seductive power of misleading oral deals. Weaving together insights from behavioral ethics and social psychology, we argue that current approaches to such deals are undertheorized and develop a more nuanced approach.
We show that the law underestimates, and thus does not properly respond to, the harm of seductive oral deals. Seductive oral deals are both more potent and more ubiquitous than previously assumed. They are more potent because consumers’ contracting reality and tendency to trust others lead them to rely on salespeople’s oral assertions even when they are false. They are ubiquitous because even ordinary, law-abiding people, when operating as salespeople, find ways to justify mundane unethical behavior, such as lying to customers.
Seductive oral deals can harm both consumers and scrupulous competitors, erode important societal values, and undermine market efficiency. At the same time, consumers face substantial psychological, financial, evidentiary, and doctrinal hurdles should they wish to rely on precontractual oral interactions when the written contract disclaims what they were told. Against this background, the Article makes several recommendations that tackle the root causes that facilitate seductive oral deals.