Modern Contract Law is Premised on Bullshit
Tricking people into saying they agree isn't the same as actually agreeing
The following is the transcript of my troop deployment (i.e. ending rant) from episode 83 of my news podcast The Mind Killer. If you like it, please consider subscribing to the podcast
Contract law has its origins in Ancient Greece and is one of the bedrock principles of society. The basic requirements for a contract are a “meeting of the minds” and some kind of exchange. The “meeting of the minds” requirement historically meant that for a contract to be valid and enforceable, there had to be mutual assent to each term of the contract. In other words, both parties had to actually understand and agree. For a person to agree to something, they had to know what they were agreeing to and intend to be bound by it.
Modern contract law has completely gotten rid of that requirement and replaced it with the need for “manifestation of assent.” Now a contract is whatever a person can be convinced to sign, regardless of whether they’ve actually read it or understand what it means. As long as you clicked the “I agree” button, you’re bound by everything in the terms and conditions no matter what’s in there. Businesses know that almost nobody reads these things, so they draft them to be ridiculously favorable to the company.
Modern life involves being confronted with these contracts multiple times per day. Nearly everything you use, whether paid or not, has dozens of pages of terms and conditions that go along with it. Most of the time, they don’t even show it to you, but even when they do, they know you’re just going to scroll to the bottom and click agree. Why wouldn’t you? Even if you were a sophisticated contract lawyer, nobody has the time and energy to read a hundred pages of dense legalese every time they want to use a product.
It is shameful that our court system enforces these farcical contracts as if anyone intended to be bound by them. At minimum, there should be an affirmative defense in any breach of contract action called “nobody reads this contract,” and businesses who want to enforce them should be required to disclose how much time the average consumer spends reading the contract or what percentage of people actually click the “terms and conditions” link. If the defendant can show that a reasonable person wouldn’t have read the contract terms, they should be unenforceable.
I’m sympathetic to the idea that businesses need to protect themselves and should be allowed to give people discounts in exchange for favorable contract terms, and that they can’t force consumers to read the proposed contract. My proposed solution is for trade associations to develop “industry standard” contract language that consumers can review once, then know what they’re getting into whenever they see it in the future. Then if a company sticks to the standard language, there’s a good argument that the consumer knew or should have known what they were agreeing to. If companies want to deviate from the standard language, they can, but each term should need to be presented separately, in plain language, in a way that people are likely to read, before the customer enters their payment information.This lets companies with special needs make special contracts, but creates enough friction in the transaction that companies are going to be discouraged from changing the language unless it’s really important.
To be clear, I’m very in favor of freedom of contract. I’m just not in favor of tricking people into giving a fake agreement to something they’ve never read and wouldn’t understand if they did. I propose we go back to the old rule where a contract required a meeting of the minds, not just clicking an “I agree” button.