Boilerplate: A Threat to the Rule of Law?

Abstract

In today’s US, transactions between firms and consumers (including businesses in the position of consumers) routinely contain fine-print terms deleting rights to legal remedies against the firm, such as exculpatory clauses, waivers of consequential damages, and mandatory pre-dispute arbitration clauses. This chapter argues that such remedial rights should not be treated as mere default rules routinely waivable by recipients of fine-print contracts (‘boilerplate’), because such rights deletions threaten the rule of law by undermining rights structures that are central to the state’s obligations toward the public. When remedial rights are subject to easy waiver by boilerplate, they place recipients into a situation that might be called quasi-anarchy; that is, a one-sided situation resembling the anarchy that the state is supposed to supplant. Moreover, they underwrite a scheme of privatization that amounts to exercise of arbitrary power over recipients; and they transgress the principle of equality before the law by separating people that retain legal rights from people that do not. Such rights should remain situated in the public realm, and subject to a species of market-inalienability. This chapter thus argues for a modified version of the public/private distinction, related to maintaining the rule of law.