Why a New Deal Must Address the Readability of U.S. Consumer Contracts

Authors

Michael L. Rustad, Suffolk University Law School

Abstract

United States companies are increasingly drafting consumer contracts that are complex and unreadable, thus making it difficult for many Americans to comprehend terms of use that apply to goods and services. Many U.S. companies are creating terms of use that are, in effect, rights-foreclosure schemes. Many consumer agreements cap damages at a nominal amount, disclaim all warranties, limit remedies, and impose mandatory arbitration clauses and class action waivers. U.S. courts enforce these unfair mass-market contracts with few exceptions. My proposal for a New Deal for Consumer Contracts, as described in this Article, would impose a more exacting readability standard, enforcing agreements only if they were drafted at a reading level of the eighth grade or below in order to protect consumers against inadvertently agreeing to unfair standard contract terms such as unfair choice of law and forum clauses, limits on recovery, predispute arbitration, and disclaimers of all significant remedies. The New Deal for Consumer Contracts would invalidate unfair and deceptive consumer clauses—a reform that would synchronize U.S. consumer law with the mandatory consumer laws of the twenty-seven countries of the European Union.

Keywords

Legislation, Education Law, Research, Science and Technology Law, Health Law and Policy, Informed Consent, Medical Jurisprudence, Physicians, Health Care Services

Disciplines

Education Law | Health Law and Policy | Law | Legislation | Medical Jurisprudence | Science and Technology Law

Recommended Citation

Michael L. Rustad, Why a New Deal Must Address the Readability of U.S. Consumer Contracts, 44 Cardozo L. Rev. 521 (2022).
Available at: https://larc.cardozo.yu.edu/clr/vol44/iss2/4