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Full-Text Articles in Law
One-Sided Contracts In Competitive Consumer Markets, Lucian A. Bebchuk, Richard A. Posner
One-Sided Contracts In Competitive Consumer Markets, Lucian A. Bebchuk, Richard A. Posner
Michigan Law Review
The usual assumption in economic analysis of law is that in a competitive market without informational asymmetries, the terms of contracts between sellers and buyers will be optimal-that is, that any deviation from these terms would impose expected costs on one party that exceed benefits to the other. But could there be cases in which "one-sided" contracts containing terms that impose a greater expected cost on one side than benefit on the other-would be found in competitive markets even in the absence of fraud, prohibitive information costs, or other market imperfections? That is the possibility we explore in this Article.
"Contracting" For Credit, Ronald J. Mann
"Contracting" For Credit, Ronald J. Mann
Michigan Law Review
On a recent day, I used my credit cards in connection with a number of minor transactions. I made eight purchases, and I paid two credit card bills. I also discarded (without opening) three solicitations for new cards, balance transfer programs, or other similar offers to extend credit via a credit card. Statistics suggest that I am not atypical. U.S. consumers last year used credit cards in about 100 purchasing transactions per capita, with an average value of about $70. At the end of the year, Americans owed nearly $500 billion dollars, in the range of $1,800 for every man, …
The Boilerplate Puzzle, Douglas G. Baird
The Boilerplate Puzzle, Douglas G. Baird
Michigan Law Review
The warranty that comes with your laptop computer is one of its many product attributes. The laptop has a screen of a particular size. Its microprocessors work at a particular speed, and the battery lasts a given amount of time between recharging. The hard drive has a certain capacity and mean time to failure. There is an instruction manual, online technical support (or lack thereof), and software. Then there are the warranties that the seller makes (or does not make) that are also part of the bundle. Just as I know the size of the screen, but nothing about the …
Online Boilerplate: Would Mandatory Website Disclosure Of E-Standard Terms Backfire?, Robert A. Hillman
Online Boilerplate: Would Mandatory Website Disclosure Of E-Standard Terms Backfire?, Robert A. Hillman
Michigan Law Review
A law backfires when it produces results opposite from those its drafters intended. Lots of laws may have backfired. For example, people opposed to hate crimes legislation think that the laws "inflame prejudice rather than eradicate it." The Endangered Species Act, according to some analysts, has helped destroy rather than preserve the creatures listed by the Act. Even consumer protection laws, some believe, increase prices and confuse consumers instead of protecting them. This Article analyzes whether mandatory website disclosure of standard terms, advocated by some as a potential solution to market failures when consumers contract over the Internet, is another …
The Return Of Bargain: An Economic Theory Of How Standard-Form Contracts Enable Cooperative Negotiation Between Businesses And Consumers, Jason Scott Johnston
The Return Of Bargain: An Economic Theory Of How Standard-Form Contracts Enable Cooperative Negotiation Between Businesses And Consumers, Jason Scott Johnston
Michigan Law Review
Among attorneys, judges, and legal academics, there is virtual consensus that the widespread use by business firms of standard-form contracts in their dealings with consumers has completely eliminated bargaining in consumer contracts. I believe that this perception is false, that rather than precluding bargaining and negotiation, standard-form contracts in fact facilitate bargaining and are a crucial instrument in the establishment and maintenance of cooperative relationships between firms and their customers. On this view, which I elaborate below, firms use clear and unconditional standard form contract terms not because they will insist upon those terms, but because they have given their …
The Hidden Roles Of Boilerplate And Standard-Form Contracts: Strategic Imposition Of Transaction Costs, Segmentation Of Consumers, And Anticompetitive Effects, David Gilo, Ariel Porat
The Hidden Roles Of Boilerplate And Standard-Form Contracts: Strategic Imposition Of Transaction Costs, Segmentation Of Consumers, And Anticompetitive Effects, David Gilo, Ariel Porat
Michigan Law Review
Standard-form contracts offered to consumers contain numerous terms and clauses, most of which are ancillary to the main terms of the transaction. We call these ancillary terms "boilerplate provisions." Since most consumers do not read boilerplate provisions or, if they do, find them hard to understand, courts are suspicious of boilerplate provisions and sometimes find them unenforceable under the doctrine of unconscionability. At times, courts conclude that harsh terms have not been accepted by consumers in the first place and therefore are not included in the contract, and on other occasions courts interpret boilerplate provisions in favor of consumers, applying …
The Role Of Nonprofits In The Production Of Boilerplate, Kevin E. Davis
The Role Of Nonprofits In The Production Of Boilerplate, Kevin E. Davis
Michigan Law Review
Drafting contracts-by which I really mean the documents that embody contracts-requires investments of time, experience, and ingenuity. Those investments may yield significant returns because the quality of contractual terms can be an important determinant of the gains that parties realize from trade. This in tum suggests that, from an economic perspective, it is important to understand how contracts are produced. It seems particularly important to examine the production of contracts or individual contractual terms that are widely used-that is to say, "boilerplate." In a market oriented society, boilerplate is the predominant feature of the network of legal obligations that provides …
Contra Proferentem: The Allure Of Ambiguous Boilerplate, Michelle E. Boardman
Contra Proferentem: The Allure Of Ambiguous Boilerplate, Michelle E. Boardman
Michigan Law Review
Bad boilerplate can shake one' s faith in evolution; not only does it not die away, it multiplies. The puzzle is why. Much of boilerplate is ambiguous or incomprehensible. This alienates consumers and is i ncreasingly punished by courts construing the language against the drafter. There must, therefore, be some hidden allure to ambiguous boilerplate. The popular theory is trickery: drafters lure consumers in with promising language that comes to nothing in court. But this trick would require consumers to do three things they do not do-read the language, understand it, and take comfort in it. There is a hidden …
Contract As Statute, Stephen J. Choi, G. Mitu Gulati
Contract As Statute, Stephen J. Choi, G. Mitu Gulati
Michigan Law Review
The traditional model of contract interpretation focuses on the "meeting of the minds." Parties agree on how to structure their respective obligations and rights and then specify their agreement in a written document. Gaps and ambiguities are inevitable. But where contract language exists for the point in contention and a dispute arises as to the meaning of this language, courts attempt to divine what the parties intended. Among the justifications for deferring to the intent of the parties is the assumption that parties know what is best for themselves. Deference also arguably furthers autonomy values. Not all contracts and contract …
Modularity In Contracts: Boilerplate And Information Flow, Henry E. Smith
Modularity In Contracts: Boilerplate And Information Flow, Henry E. Smith
Michigan Law Review
Contractual boilerplate is a little like property. Such a statement might seem like a category mistake. After all, contractual boilerplate language is part of contracts, which, unlike property, are freely customizable by the parties. Contracts create rights between those parties, not against the world at large. Nor do people who devise new boilerplate terms usually have intellectual property in the provisions themselves. I will argue that, in an interesting and overlooked way, boilerplate is the first way station on the road from contract to property. In particular, boilerplate, like all legal communication, is the result of striking a trade-off between …
The Strategy Of Boilerplate, Robert B. Ahdieh
The Strategy Of Boilerplate, Robert B. Ahdieh
Michigan Law Review
That boilerplate is pervasive is hardly surprising. In a variety of ways, standardized terms in day-to-day contracts serve an essential cost-saving function. By this measure, one might expect less frequent reliance on boilerplate in high-value contracts among sophisticated parties. Yet standard terms would appear to be no less widespread in contracts among the sophisticated. Notwithstanding their representation by able counsel, charged to craft comprehensive and detailed, but also particularized, contracts, such parties will commonly conclude agreements comprised heavily of traditional terms--contracting norms of a sort-rather than terms tailored to the distinct features of their particular bargain. Examples of seemingly suboptimal …
Boilerplate Today: The Rise Of Modularity And The Waning Of Consent, Margaret Jane Radin
Boilerplate Today: The Rise Of Modularity And The Waning Of Consent, Margaret Jane Radin
Michigan Law Review
Thanks to the vision of Omri Ben-Shahar and the excellence of the scholars contributing to this symposium, students of the law of commercial exchange transactions will now understand how important and interesting, and indeed exciting, boilerplate really is. The various presentations are so rich that my assigned task of commentary cannot approach an adequate summation. Instead of attempting such a task, therefore, I will take up a slightly different one. My commentary will relate some of the ideas presented in the symposium to two themes that I think are significant for the groundwork of contract today: the growing modularity of …
The Law And Sociology Of Boilerplate, Todd D. Rakoff
The Law And Sociology Of Boilerplate, Todd D. Rakoff
Michigan Law Review
In my view, the scholarship presented at this symposium demonstrates that, in order to analyze form contracts and boilerplate successfully, one must carry out a set of operations that embodies an approach I will call law and sociology. But I presume I was invited to be a commentator at this conference on boilerplate not because the article I wrote on one branch of the subject awhile back exemplified this methodological approach, but because it took a rather strong substantive position. And so I think I ought first to say a brief word about that. The article in question concerned contracts …