Reconsidering Boilerplate: Confronting Normative and Democratic Degradation

AuthorMargaret Jane Radin
Pages617-656

Page 617

RECONSIDERING BOILERPLATE:

CONFRONTING
NORMATIVE AND DEMOCRATIC DEGRADATION

MARGARET JANE RADIN

I. INTRODUCTION

Most of us are used to receiving paperwork (or its electronic equivalent) during transactions. We are given forms to sign when we rent an automobile or an apartment, and piles of forms to sign when we buy an automobile or a house. We are given forms to sign when we get a job, when we join a gym, when we go skiing, or when we take a cruise. Most of us do not read all of these forms we receive and would not understand them if we did. We click “I agree” to buy products or services on the Internet after being shown lists of fine-print terms which we do not read. We receive forms even when we do not sign them or click “I agree,” such as the fine-print terms of service (TOS) interior to websites, or the fine print on everything from parking lot tickets to theater tickets to sporting events tickets.1

Copyright © 2012, Margaret Jane Radin.

∗ Henry King Ransom Professor of Law, University of Michigan; and William Benjamin Scott & Luna M. Scott Professor of Law, Emerita, Stanford University. I was honored to be invited to deliver the 2011 Sullivan Lecture at Capital University Law School on April 8, 2011, upon which this article is based. My sincere thanks to the commentators on that occasion, Professor Jeffrey T. Ferriell and Professor Andrew Gold; and to my colleague, Professor Nina Mendelson, and our students in the Fall 2011 Student Scholarship Workshop for their helpful comments.

1For example, a typical concert ticket may read, in almost unreadable fine print: The holder of this ticket is not allowed to transmit or aid in transmitting any picture, video, audio reproduction, or other such replication of the event (including pre-and post-event activities). The holder grants unrestricted right and license to use the holder’s likeness incidental to any broadcast, telecast, photograph taken, or other transmission or reproduction in connection with the event or otherwise to the producers, presenters, and news media. Date and time subject to change. Holder of this ticket assumes all risk and danger incidental to any event for which this ticket is issued. All children, regardless of age, must have a ticket. No food or beverage allowed in the facility. Not responsible for lost, stolen, or destroyed tickets. No artificial noisemakers allowed.

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Businesses use forms such as the ones most of us receive almost every day to change the legal infrastructure applicable to us. They use these forms to create their own legal universe. Instead of the set of rights given to individuals by the legal system, we have only the constricted set of legal rights as rearranged by the firms who deliver forms to us. Instead of warranty, we have warranty disclaimers; instead of full consequential damages, we have severe remedy limitations; instead of the right to sue, we have mandatory arbitration. Many forms, such as those commonly used by cell phone providers, declare that they are contracts that can be modified unilaterally at will by the service provider.2That is not what is taught in first-year contracts class.3

Although lay people may not consider these forms to be contracts,4

they are treated as contracts by our legal system.5They have been called adhesion contracts,6and more colloquially, boilerplate7or “take-it-or Price includes gross receipts tax. Tickets bought from unauthorized
sources may have been lost, stolen, or obtained improperly. Management reserves the right to deny admission to the holder of any
such ticket. Any purchase from unauthorized sources are at your own
risk. This ticket may not be used for advertising, promotions (including
contests, prizes or sweepstakes), or other trade purposes without the
express written consent of the [sponsoring entity]. No Refunds, No Exchanges.

2AT&T Mobility v. Concepcion, 131 S. Ct. 1740, 1744 (2011).

3See, e.g., RESTATEMENT (SECOND) OF CONTRACTS § 89 (1981). The contract at issue in AT&T Mobility is described in the majority opinion as modifiable at will by the firm. AT&T Mobility, 131 S. Ct. at 1744.

4When I ask a class of new first-year law students whether they have entered into any contracts during the past week, many of them say “No.” Of course, they at least have clicked “I agree” here, there, and everywhere. “By using” the mail server of the university, they have “agreed” to its terms.

5See Friedrich Kessler, Contracts of Adhesion—Some Thoughts About Freedom of Contract, 43 COLUM. L. REV. 629, 631 (1943).

6In the above article, Friedrich Kessler attributes the first use of “contract of adhesion” to Edwin Patterson in 1919. Id. at 632 n.11.

7According to Wikipedia: “The term dates back to the early 1900s, referring to the thick, tough steel sheets used to build steam boilers. From the 1890s onwards, printing plates of text for widespread reproduction such as advertisements or syndicated columns were cast or stamped in steel (instead of the much softer and less durable lead alloys used otherwise) ready for the printing press and distributed to newspapers around the United

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leave-it” contracts.8Adhesion contracts have long been problematic for the traditional justification of contract enforcement based on voluntary commitment by willing parties.9The fact that consent to these forms is lacking or at best seriously problematic is a normative degradation for the legal system.

Mass-market adhesion contracts also give rise to a democratic degradation. Forms promulgated by firms to govern the rights of users of products and services are removing rights that are granted through democratic processes and substituting the constricted system of rights that the firm wishes to impose.

In reconsidering boilerplate, I seek to raise the following questions: To what extent should firms be permitted to create their own legal universe in this way? What justifications can be brought forward in favor of firms creating their own legal universe? What limits should exist on such universe-creation? How can these limits best be implemented? This article focuses primarily on the degradation—normative and democratic— associated with boilerplate regimes. It also proposes a few suggestions for ameliorating the situation.10

II. BOILERPLATE AND CONTRACT

The law considers boilerplate to be a method of contract formation.11

That is, the law usually holds that a contract is formed between the firm

States. They came to be known as ‘boilerplates’. Until the 1950s, thousands of newspapers received and used this kind of boilerplate from the nation's largest supplier, the Western Newspaper Union. Some companies also sent out press releases as boilerplate so that they had to be printed as written. The modern equivalent is the press release boilerplate, or ‘boiler,’ a paragraph or two that describes the company and its products.” Boilerplate (text), WIKIPEDIA, http://en.wikipedia.org/wiki/Boilerplate_text (last visited Feb. 17, 2012).

8Standard Form Contract, WIKIPEDIA, http://en.wikipedia.org/wiki/Standard_form_con tract (last visited Jan. 5, 2012). See also Kessler, supra note 5, at 632.

9Kessler, supra note 5, at 632.

10See Margaret Jane Radin, Boilerplate: The Fine Print, Vanishing Rights, and the Rule of Law (forthcoming 2012) (on file with author). The book will cover the topics of this article in greater depth, as well as topics that are not within the scope of this article, such as regulatory solutions.

11See Charles L. Knapp, Taking Contracts Private: The Quiet Revolution in Contract Law, 71 FORDHAM L. REV. 761, 774 (2002); Russell Korobkin, Bounded Rationality, Standard Form Contracts, and Unconscionability, 70 U. CHI. L. REV. 1203, 1204 (2003) (citing Graham v. Scissor-Tail, Inc., 623 P.2d 165, 172 (1981)).

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and the recipient, and the terms of the contract are the fine print in the boilerplate.12Even when there is no signature, such as when we click “I agree” online, courts are likely to find that a contract has been formed unless there is some other reason for invalidating the terms.13Boilerplate has really come into its own in the online environment. Firms use other online procedures that are even further removed from the kind of consent we normally suppose is required for a contract, such as, “By browsing our website, you have agreed to all of the terms we have placed in the link entitled Terms of Service, together with any changes that we make from time to time.” Courts may be less likely to find that these procedures form an enforceable contract.14Firms today, however, are hopeful that courts will rule in their favor if these procedures are challenged—hopeful enough to use these procedures very widely.

In the United States, most consumers are subject to one or more of the following: arbitration clauses, choice-of-forum clauses, exculpatory clauses, disclaimers of warranty, limitations of remedies, divestments of information user rights, or a variety of other onerous clauses.15Even though I know more than most recipients about the legal significance of these clauses, I cannot do anything about them. So, just like almost everyone else, I do not read them.16I must take them or forego the transaction, just like everyone else. I cannot employ a financial management firm for my retirement account without accepting its


12See Korobkin, supra note 11 (citing Graham, 623 P.2d at 172).

13See Anthony M. Balloon, From Wax Seals to Hypertext: Electronic Signatures, Contract Formation, and a New Model for Consumer Protection in Internet Transactions,
50 EMORY L.J. 905, 905 (2001) (citing 15 U.S.C. § 7001 (2006)).

14See, e.g., Specht v. Netscape Commc’ns Corp., 306 F.3d 17, 20 (2d Cir. 2002). The judges...

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