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Contracts

Contracts

Washington and Lee University School of Law

2009

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Full-Text Articles in Law

The Cost Of Consent: Optimal Standardization In The Law Of Contract, Joshua A.T. Fairfield Jan 2009

The Cost Of Consent: Optimal Standardization In The Law Of Contract, Joshua A.T. Fairfield

Scholarly Articles

This article argues that informed consent to contract terms is not a good to be maximized, but is rather an information cost that courts should minimize. The goal of mass-market contract law ought to be to keep costs low by encouraging contract standardization. The article applies information cost theory to show that information-forcing rules are often inefficient at both the micro- and macroeconomic levels. Such rules also impose greater costs on third parties than the benefits they create for the contracting parties. When one consumer creates an idiosyncratic deal, the information-savings benefits of standardization are reduced for all other potential …