CHAMPAIGN, Ill. — Movies, TV shows, music, books and all kinds of items can be purchased much more readily than a generation ago, turning what was once a trip to a shopping mall into a few taps on a smartphone.
But before they’re able to listen to that new song, consumers might be compelled to agree to the software license’s “terms and conditions” – typically, a dense thicket of technical and legal jargon that stretches upward of 30 pages or more if printed. And in clicking the “I agree” button to make it all go away, consumers may believe they have entered into a contract with a company that contains numerous terms. According to a new paper by a University of Illinois legal scholar, what consumers have really entered into is a “pseudo-contract” with a company – a unilaterally created, legally dubious one-sided system of private obligations that’s arrived at without any actual haggling over terms and conditions or consumer understanding or agreement.
Robin B. Kar, a University of Illinois professor of law and of philosophy, and co-author Margaret Jane Radin, a professor of law at the University of Michigan and the University of Toronto, argue that the boilerplate text that nobody reads has very tenuous legal footing.
“Everyone assumes that it’s all part of a contract because you’re clicking ‘I agree,’ after receiving copious text, but the simple version is that it isn’t,” said Kar, an internationally recognized scholar of contract law, philosophy of law, and moral and legal philosophy. “Contract formation is a cooperative process, whereby parties use language to reach an actual agreement, and when one side is conveying a mountain of terms that no one can read during the process of contract formation, they simply aren’t following the cooperative norms needed to produce an actual contractual agreement.”
What is it, then, if it’s not a contract? There is a core of contract on some key terms, but the rest is a pseudo-contract, Kar said.
“Many of the purported terms act like contract, but aren’t really contributing to any actual agreement,” he said. “These are fake terms. Corporations are burying people in something that they’ll never read, much less be able to comprehend. That’s problematic because contracting is about mutually coming to an agreement with language. It’s not about one side assuming a bunch of risks that the other party imposes upon them because chances are they won’t read the final text. It’s about reaching common ground.”
It’s a troublesome trend because courts don’t know what to do with language that’s not-quite-contractual but is something that one party has nevertheless agreed to, judged by outward forms and clicks, Kar said.
“Courts mistakenly think their options are to think of it in all-or-nothing terms: It’s a contract or it’s not a contract,” he said. “So when they get these types of cases, they say you clicked ‘I agree,’ therefore you agreed to a contract and its terms, without ever considering what kind of a shift that spurious rationale is creating. But nobody reads these terms and conditions – judges don’t read them, either. If you were to actually read the text, a lot of it is obviously not contract language. It’s how to turn off your settings, things like that.
“So these legal developments are problematic for a number of reasons. But from a legal and academic standpoint, the lack of a thoughtful framework for how to proceed is perhaps the most frustrating. Old concepts and distinctions just don’t seem to be working to address these new problems.”
There are some places in which the law is sensitive to the issue, Kar noted.
“For example, arbitration clauses are the worst place for this,” he said. “In a lot of cases, courts seem to be sympathetic, but they don’t have the linguistic or conceptual tools to justify siding with end-users who waive their rights and click the button. This paper gives judges the analytic and doctrinal tools to separate out which is part of the actual contract is and which isn’t really a traditional contract.”
In a typical contract formation in online settings, reams of text are exchanged before any sort of agreement is reached.
“This is the problem in the digital age: Not only can you not change anything, it’s never communicated cooperatively before the end-user clicks ‘I agree,’” Kar said. “It’s not even part of what you come to a linguistic agreement on. Now we’ve got stuff that’s not only nonnegotiable, it’s not even in the front part of the process. We want to separate out problems of nonnegotiability and problems of power imbalance, on the one side, from the vanishing core of actual agreement on the other.
“Everyone knows that they need to click something to get something – but what they also need to know is that a click can’t magically transform everything into a contract. It’s a pseudo-contract, and it shouldn’t be treated as something that’s ironclad.”
If the trend continues, it’s likely that all future digital transactions will have some sort of pseudo-contract language attached to it that end-users must agree to before they can do anything online, Kar said.
“Most e-commerce sites have something like that right now, because what has happened is that most companies have begun selling online,” he said. “But the trend to the noncommercial side is inexorable. It’s contract creep. It used to just be here and there, but now you can attach so much information to any one purchase or interaction that it would take a lifetime to read it. And it’s becoming more ubiquitous with almost every consumer transaction.
“So we want consumers to know that there is a distinction here. The scope of these agreements is much more narrow and limited than a contract. And we’re hoping to change how courts approach these topics and also how consumers understand their rights.”