4 ms·

I always wonder if it is reasonable to assume that people are capable of understanding service agreements. Like, could a court make a decision that the customer

by jnsie 6y ago

I always wonder if it is reasonable to assume that people are capable of understanding service agreements. Like, could a court make a decision that the customer was not a lawyer and therefore could not fully understand the agreement. Further, that the barrier to hiring a lawyer to understand such an agreement is too high (i.e. expensive) and it is unreasonable to expect the customer to do so.

deleted 6y ago
[deleted]
CobrastanJorji 6y ago
A court COULD make that decision, but there're centuries of precedent that this is not the case, which is tragic. The court will assume that no reasonable person would agree to a contract without reading the contents and consulting with a lawyer on anything that is unclear during the contract's negotiations, and for major contracts between large companies, they would be correct. It would be a nearly revolutionary change to introduce a law like "you cannot meaningfully agree to any contracts or agreements without a lawyer advising you and a representative of the other party empowered to negotiate the terms." I'm all for it, though. You'd need to fix several other kinds of laws around liability for negligence and the like, but those things need fixing anyway. The current hack where everybody agrees to waive their rights to sue for negligence is stupid. You would, however, need a new kind of thing that handled common agreements like terms of a credit card. There need to be terms, hiring lawyers for each person is ridiculous, but "contract" is probably the wrong model since no customer could be expected to understand it all, meaningfully consent to it, or negotiate the terms. I would be interested in what an alternative system could be. I kind of imagine a government body deciding on acceptable terms for various forms of business, effectively acting as the customer's agent in negotiations, but that seems ripe for corruption and also really inefficient and hard to innovate around. Suggestions?
- adriand 6y ago
  Suggestion: regulation. There are already many industries where what you can agree to is regulated. There should be more.
  - moron4hire 6y ago
    Seriously. Look at the car market. Every dealership has a binding arbitration clause in their purchase agreements and will not sell you the car without it. "If you don't like it, go somewhere else". But there is nowhere else to go.
- alisonkisk 6y ago
  You have it backwards. There is a mountain of precedent behind the idea that customers can't understand the fine print, and thus these "contracts of adhesion" are restricted.
  - deleted 6y ago
    [deleted]
  - CobrastanJorji 6y ago
    That's another nasty hack, though. First, courts decide that not reading or not understanding a contract is not an excuse. Then, companies just start having their customers agree to ridiculous terms. So courts try and fix it by partially restricting those 'agreements.' "Okay, so you're allowed to waive the right to sue for negligence, but you can't waive the right to sue for gross negligence." It's a situation where companies can basically get customers to waive every right they have right up until a fuzzy "unconscionable" line. That's a quick hack around a terrible system.
- sandworm101 6y ago
  Freedom of contract. FREEDOM!! Americans have every right to sign horrible contracts. They can also done all thier money to doll museums, or gamble it away in vegas. Like it or not, any measures that sound like they are limiting consumer choice, even choice to make obvious mistakes, will face serious resistance. The outer limits on contracts are things like slavery, children, and taking advantage of the disabled. Bad printer service contracts dont come close.
  - a1369209993 6y ago
    That is specifically the problem here; you don't have freedom of contract if there is no possiblity of negotiating a different contract.
    - sandworm101 6y ago
      The freedom is before signing. You are free to sign or not, make whatever deal you care to. That includes signing away your ability to get out of bad deals.
      - a1369209993 6y ago
        > You are free to [...] make whatever deal you care to. Again, the problem is specifically that you are not free to make whatever deal you care to, because the counterparty has been permitted to amortize the costs of adversarially designing one particular deal across a large number victims, and consequently is able to refuse to negotiate.
  - CobrastanJorji 6y ago
    I'm a big proponent of freedom to do dumb things, but in general when MOST people freely choose any given dumb thing, that's a strong symptom that they are not freely choosing.
  - corty 6y ago
    I like the German approach here (surprise, /me German...): Non-negiotiable standard contracts that are applied to consumer contracts en masse are called "Allgemeine Geschaeftsbedingungen (AGB)" (roughly: common business conditions). A business may apply those, but if they do, they need to conform to a restrictive law (AGBG) regulating what is and isn't allowed in such conditions. E.g. no future changes without an exchange of equal value to the changes, no surprising clauses that are not "normal" for this kind of situation, no grossly unequal considerations to begin with. Individuals and businesses still have freedom of contract however, if a contract is really negotiated freely, that is, in an equal exchange between both parties. If there was no negotiation or a very unequal one ("take it or leave it, we'll block any of your change requests but you need the ink now"), AGBG applies. In all situations mentioned above, the consumer had no opportunity to negotiate (a symbolic "negotiation phone number" in the smallprint doesn't count, etc), so all those fancyful clauses or the whole contract conditions would just be unenforcable, with the most consumer-friendly interpretation applied to the rest as a matter of law.
- Veserv 6y ago
  An idea I have had is having a way to create a voluntary consumer association which can negotiate terms with other parties on behalf of its members. These agreements would override any terms a member accidentally agrees to with respect to that party unless the member explicitly informs the association that they are negotiating their own agreement. This would provide a way for consumers to collectively negotiate these contracts in their own interest while still allowing companies to create specific non-trivial contracts that properly manage the expected relationship. This has the desirable property that it supports heterogeneous solutions and encourages competition amongst contract negotiators to negotiate better terms or ones that more closely align with the interests of their members.
- smsm42 6y ago
  > The court will assume that no reasonable person would agree to a contract without reading the contents and consulting with a lawyer That's what I always do when I go to the grocery store to buy eggs and to Office Depot to buy printer ink. I call my lawyer and say "It's that time again, I have to buy some printer paper, ink, carrots, eggs and cheese, so that's five contracts for you to read and verify, we should be done in less than a day!". With very reasonable price of $400 per hour, I don't even have to ask what the actual items cost, compared to the expense for the contact reading it's peanuts anyway. Oh, btw, need to call the lawyer about the contract for peanuts, I'm almost out!
  - CobrastanJorji 6y ago
    Yes, that'd be ridiculous, and that's why my grocery store does not require me to sign any agreements when I buy produce.

by jnsie 6y ago

deleted 6y ago

[deleted]

CobrastanJorji 6y ago

A court COULD make that decision, but there're centuries of precedent that this is not the case, which is tragic. The court will assume that no reasonable person would agree to a contract without reading the contents and consulting with a lawyer on anything that is unclear during the contract's negotiations, and for major contracts between large companies, they would be correct. It would be a nearly revolutionary change to introduce a law like "you cannot meaningfully agree to any contracts or agreements without a lawyer advising you and a representative of the other party empowered to negotiate the terms." I'm all for it, though. You'd need to fix several other kinds of laws around liability for negligence and the like, but those things need fixing anyway. The current hack where everybody agrees to waive their rights to sue for negligence is stupid. You would, however, need a new kind of thing that handled common agreements like terms of a credit card. There need to be terms, hiring lawyers for each person is ridiculous, but "contract" is probably the wrong model since no customer could be expected to understand it all, meaningfully consent to it, or negotiate the terms. I would be interested in what an alternative system could be. I kind of imagine a government body deciding on acceptable terms for various forms of business, effectively acting as the customer's agent in negotiations, but that seems ripe for corruption and also really inefficient and hard to innovate around. Suggestions?

adriand 6y ago
Suggestion: regulation. There are already many industries where what you can agree to is regulated. There should be more.
- moron4hire 6y ago
  Seriously. Look at the car market. Every dealership has a binding arbitration clause in their purchase agreements and will not sell you the car without it. "If you don't like it, go somewhere else". But there is nowhere else to go.
alisonkisk 6y ago
You have it backwards. There is a mountain of precedent behind the idea that customers can't understand the fine print, and thus these "contracts of adhesion" are restricted.
- deleted 6y ago
  [deleted]
- CobrastanJorji 6y ago
  That's another nasty hack, though. First, courts decide that not reading or not understanding a contract is not an excuse. Then, companies just start having their customers agree to ridiculous terms. So courts try and fix it by partially restricting those 'agreements.' "Okay, so you're allowed to waive the right to sue for negligence, but you can't waive the right to sue for gross negligence." It's a situation where companies can basically get customers to waive every right they have right up until a fuzzy "unconscionable" line. That's a quick hack around a terrible system.
sandworm101 6y ago
Freedom of contract. FREEDOM!! Americans have every right to sign horrible contracts. They can also done all thier money to doll museums, or gamble it away in vegas. Like it or not, any measures that sound like they are limiting consumer choice, even choice to make obvious mistakes, will face serious resistance. The outer limits on contracts are things like slavery, children, and taking advantage of the disabled. Bad printer service contracts dont come close.
- a1369209993 6y ago
  That is specifically the problem here; you don't have freedom of contract if there is no possiblity of negotiating a different contract.
  - sandworm101 6y ago
    The freedom is before signing. You are free to sign or not, make whatever deal you care to. That includes signing away your ability to get out of bad deals.
    - a1369209993 6y ago
      > You are free to [...] make whatever deal you care to. Again, the problem is specifically that you are not free to make whatever deal you care to, because the counterparty has been permitted to amortize the costs of adversarially designing one particular deal across a large number victims, and consequently is able to refuse to negotiate.
- CobrastanJorji 6y ago
  I'm a big proponent of freedom to do dumb things, but in general when MOST people freely choose any given dumb thing, that's a strong symptom that they are not freely choosing.
- corty 6y ago
  I like the German approach here (surprise, /me German...): Non-negiotiable standard contracts that are applied to consumer contracts en masse are called "Allgemeine Geschaeftsbedingungen (AGB)" (roughly: common business conditions). A business may apply those, but if they do, they need to conform to a restrictive law (AGBG) regulating what is and isn't allowed in such conditions. E.g. no future changes without an exchange of equal value to the changes, no surprising clauses that are not "normal" for this kind of situation, no grossly unequal considerations to begin with. Individuals and businesses still have freedom of contract however, if a contract is really negotiated freely, that is, in an equal exchange between both parties. If there was no negotiation or a very unequal one ("take it or leave it, we'll block any of your change requests but you need the ink now"), AGBG applies. In all situations mentioned above, the consumer had no opportunity to negotiate (a symbolic "negotiation phone number" in the smallprint doesn't count, etc), so all those fancyful clauses or the whole contract conditions would just be unenforcable, with the most consumer-friendly interpretation applied to the rest as a matter of law.
Veserv 6y ago
An idea I have had is having a way to create a voluntary consumer association which can negotiate terms with other parties on behalf of its members. These agreements would override any terms a member accidentally agrees to with respect to that party unless the member explicitly informs the association that they are negotiating their own agreement. This would provide a way for consumers to collectively negotiate these contracts in their own interest while still allowing companies to create specific non-trivial contracts that properly manage the expected relationship. This has the desirable property that it supports heterogeneous solutions and encourages competition amongst contract negotiators to negotiate better terms or ones that more closely align with the interests of their members.
smsm42 6y ago
> The court will assume that no reasonable person would agree to a contract without reading the contents and consulting with a lawyer That's what I always do when I go to the grocery store to buy eggs and to Office Depot to buy printer ink. I call my lawyer and say "It's that time again, I have to buy some printer paper, ink, carrots, eggs and cheese, so that's five contracts for you to read and verify, we should be done in less than a day!". With very reasonable price of $400 per hour, I don't even have to ask what the actual items cost, compared to the expense for the contact reading it's peanuts anyway. Oh, btw, need to call the lawyer about the contract for peanuts, I'm almost out!
- CobrastanJorji 6y ago
  Yes, that'd be ridiculous, and that's why my grocery store does not require me to sign any agreements when I buy produce.