Ch. 7: Rethinking Legal Requirements: A case study of incomprehensible consumer contracts in the United States, in Research Handbook on Contract Design

Abstract

Consumer contract law in the US is notoriously imbalanced with respect to the superior ability of sellers to draft and understand contractual terms as compared to their lay customers. Yet despite the resulting asymmetries in processing abilities, consumer contract law in the US generally fails to encourage sellers to communicate meaningfully with their target audiences. Indeed, to the extent the law plays a role in contract design, it tends to reward more detailed, lengthy, and inaccessibly-drafted consumer contracts. This chapter explores how contract law tacitly encourages incomprehensible contracts and proposes legal reforms that would provide increased incentives for meaningful communication between buyers and sellers in the area of consumer contracts.

Chapter 7:  Rethinking Legal Requirements: A case study of incomprehensible consumer contracts in the United States, in Research Handbook on Contract Design pp. 114-133 (2022).