The members of the American Law Institute are poised to vote on May 21 on whether to adopt, for the first time, a Restatement of the Law of Consumer Contracts. That's right: A Restatement that would purport to state the law on, among other things, the take-or-leave-it contracts that we "agree to" every day and that seek to impose on us all manner of things that we know little or nothing about. [We've posted about this project several times before, including this warning posted nearly three years ago by law prof and consumer-law expert Dee Pridgen.]
The positions taken in Restatements are often highly influential with courts. For instance, most folks who litigate are aware of the influence Restatements have had on modern product-liability law.
Over at Credits Slips, Georgetown law prof Adam Levitin has posted this critique of the draft that the members will be voting on. I recommend reading Adam's post in full and taking a look at the links contained in it. In the meantime, check out these excerpts:
The draft Restatement of Consumer Contracts is founded on a set of six quantitative empirical studies about consumer contracts. This is a major and novel move for a Restatement; traditionally Restatements engaged in a qualitative distillation of the law. Professor Gregory Klass of Georgetown has [found] pervasive problems in the Reporters' coding. … A draft version of Professor Klass's study inspired me and a number of other advisors to the Restatement project to attempt our own replication study of the empirical studies of contract modification and clickwrap enforcement. We found the same sort of pervasive problems as Professor Klass. While the ALI Council completely ignored our findings, we wrote them up into a companion article to Professor Klass's. * * *
For example, [the Restatement] would require findings of both procedural and substantive unconscionability for a contract to be unconscionable, while many states only require substantive unconscionability. Not surprisingly, I am unaware of any consumer law expert (other than the Reporters) who supports the project.
But the thing that should really be a wake up call that something is very, very off with this Restatement project is the presence of outside opposition, which is virtually unheard of in the ALI process. Every major consumer group (also here, here, and here), weighed in in opposition as well as 13 state attorneys general (and also here), and our former co-blogger (and also former ALI Vice-Chair), Senator Elizabeth Warren. Nor has the opposition been solely from consumer-minded groups. The US Chamber of Commerce and the major trade associations for banking, telecom, retailers, and insurers are also opposed (albeit with very different motivations). Simply put, it's hard to find anyone other than the Reporters (and the ALI Council, which has a strong tradition of deference to Reporters) who actually likes the draft Restatement.
