Formalism and Freedom: How Standardized Contracts Counter Traditional Contract Doctrine

• In Event: Counter-Hegemonic Epistemologies as Innovation and/or Contestation - I

Abstract

Standard form contracts (SFCs) have played an important role in commercial relationships for centuries in fields such as marine shipping and banking, but are recently better recognized as the ‘terms and conditions’ agreements so prolific in the digital market space. SFCs take many forms, but generally present clauses written by one party (the drafter) with the expectation of acceptance by the other (the adherent). Adherents in digital environments consistently fail to engage with SFCs, and recent measures such as disclosure that are the result of ‘private conversations’ between courts and drafters actually exacerbate a lack of user awareness and promote the common practice of these often egregious agreements, rather than remedy this tendency.

The dominant epistemology of traditional contract law views contracts as a “meeting of the minds,” and legal scholars acknowledge SFCs challenge this understanding through their non-negotiability and inconspicuous digital presentation. This project, however, more broadly argues that SFCs further counter the fundamental hegemonic epistemology of the “freedom of contract” principle that underlies all of contract law. This principle justifies a lack of regulatory intervention through arguments of equity, which are presumably supported by an individual’s ability to freely transact; rather, modern SFCs favor capitalistic motives that solidify asymmetrical power relations and endanger consumers’ rights to privacy, agency, and freedom of speech. This project ultimately concludes that recognizing SFCs as upending the fundamentals of traditional contract law, rather than simply subverting a few of its tenets, may assist in creating customized regulations that could make these agreements fairer for consumers.

Author

• Kristin Breanne Cornelius, Department of Information Studies, UCLA