Terms In Standard Form Contracts Research Articles

Standard Form Contracts in Online Business

People have been directly selling and purchasing products and services in the past, but with the rapid development of technology nowadays, people prefer online transaction because it easy, fast and efficient. Online business platforms are becoming increasingly relevant for the sale and purchase of goods and services. The seller can earn a profit, and the buyer can easily find something they wanted to purchase. Standard form contracts are usually used to legalize transactions. Before the payment and execution of the agreement, customers must agree and consent to all the standard terms. The implementation of online contracts has resulted in the increasing use of unfair contract terms in standard form contracts in the commercial industry. This paper aims to study the standard form contracts in online business and to discuss the unfair contract terms in online standard form contracts. The approach of this study is purely qualitative where it is based on a library research and involving conceptual discussion and legal analysis. Therefore, it is hoped this article provides valuable knowledge concerning standard form contracts, online business and unfair contract terms.

Learning in Standard-Form Contracts: Theory and Evidence

Abstract Why are some contractual terms revised continuously while others are stubbornly fixed? We offer an account of both change and stickiness in standard-form contracts. We hypothesize that drafters (sellers) are more likely to revise their standard terms when they have an opportunity to learn about the terms’ costs from experience. Consider a warranty. Offering a warranty in an initial period will expose sellers to claims about malfunction by purchasers, allowing sellers to learn whether it is desirable to offer it going forward. When drafters are unable to learn in this manner, either because they fail to experiment or because the term in question is one where there is no increased opportunity to learn from experience, such terms will be revised relatively less frequently. While learning and change occur through various channels, we posit that, all else equal, terms that carry an opportunity to learn from experience will be revised more frequently, whereas terms or term modalities that do not will contribute to stickiness and stagnation. Our results support this hypothesis. Using a large sample of changes in business and consumer standard-form contracts over a period of seven years, we find that sellers are more likely to revise terms that offer an opportunity to learn from experience than those that do not. These findings are further illustrated and supported by interviews with in-house counsel. The results suggest that standard-form contract terms evolve over time as sellers learn experientially about their costs and risks. Our analysis offers new accounts for the use of boilerplate, stickiness, and change and has normative implications for the optimal design of default rules and product features (JEL codes: K12).

UNFAIR CONTRACT TERMS IN ONLINE CONTRACTS: SPECIAL REFERENCE TO ONLINE BOOKING OF FLIGHT TICKETS

E-businesses and online transaction have become a norm in today’s society. One of the industries that use e-businesses extensively is tourism business and buying online flight ticket is the most common feature of today’s way of travelling. In online booking of flight ticket transaction, the standard terms and standard form contracts are generally used to legalize the transactions and consumers have to agree to all the standard terms prior to payment and finalizing the transaction.
 Unfair contract terms are terms which may unfairly exclude or limit liabilities in a contract and such terms are legal and binding if agreed and accepted by the contractual parties. It is observed that the application of unfair contract terms is not knowingly or conscientiously accepted by one or some contractual parties as they are normally inserted as standard terms in standard form contracts. It is perceived that with the current practices of standard terms and standard form contracts in online booking of flight tickets, consumers might be a prey of unfair contract terms. This normally occurs when consumers or purchaser agreed to all terms of the airlines operators/companies without properly or vigilantly reading the whole agreements.
 This paper analyse the principles, application and effect of unfair contract terms in online booking of flight tickets agreements. For the purpose of discussion in this paper, references are only made to online terms and contract used by airlines companies incorporated in Malaysia.

Seductive Oral Deals

Legal scholars have devoted considerable attention to contractual design that exploits consumers’ vulnerabilities (“the paper deal”). For example, scholars have cautioned against the inclusion of one-sided, exploitative, or unenforceable terms in standard form contracts, and proposed solutions to address these problems. However, scant attention has been given to the role of pre-contractual promises that are disclaimed or qualified in the fine print (“the oral deal”). This Article uncovers the seductive power of misleading oral deals. Weaving together insights from behavioral ethics and social psychology, we argue that current approaches to such deals are undertheorized and develop a more nuanced approach. We show that the law underestimates, and thus does not properly respond to, the harm of seductive oral deals. Seductive oral deals are both more potent and more ubiquitous than previously assumed. They are more potent because consumers’ contracting reality and tendency to trust others lead them to rely on salespeople’s oral assertions even when they are false. They are ubiquitous because even ordinary, law-abiding people, when operating as salespeople, find ways to justify mundane unethical behavior, such as lying to customers. Seductive oral deals can harm both consumers and scrupulous competitors, erode important societal values, and undermine market efficiency. At the same time, consumers face substantial psychological, financial, evidentiary, and doctrinal hurdles should they wish to rely on precontractual oral interactions when the written contract disclaims what they were told. Against this background, the Article makes several recommendations that tackle the root causes that facilitate seductive oral deals.

Control of Price Related Terms in Standard Form Contracts: Spain

Control of Price Related Terms in Standard Form Contracts: Spain

New Zealand's Unfair Contract Terms Law Fails to Incentivise Businesses to Remove Potentially Unfair Terms from Standard Form Contracts

This paper presents the results of a study undertaken by Victoria University of Wellington in association with the Ministry of Business, Innovation and Employment over the period December 2018 to August 2019, to assess whether businesses that are offering goods or services to consumers in New Zealand on standard form terms are including potentially unfair contract terms in those contracts. The study compared the 2015 and 2018 versions of the same standard form contracts in relation to 119 businesses to assess if those businesses had reduced the number and nature of potentially unfair terms appearing in their contracts since 2015. The study also considered the number and nature of potentially unfair terms appearing in contracts of a total of 134 businesses offering goods and services in 2018. The study found that all the contracts examined in 2018 contained potentially unfair terms and that the number of potentially unfair contract terms in standard form contracts had increased between 2015 and 2018.

Control of Price Related Terms in Standard Form Contracts: Spain

English Abstract: The purpose of this paper is to analyse whether Private law could determine the fate of the Circular Economy. The article will first assess the legal relationship that the service creates between the supplier and the consumer. This relationship establishes a contractual bond in which the quality of performance is at stake. Next, the paper moves on to the complex proprietary consequences of the service, an issue that is aggravated in the context of real estate. The erga omnes effects of property rights justify the chapter’s focus on the supplier-customer relationship but also on the interaction of third parties with the goods deployed in the service. Lastly, the article addresses an issue that affects both the contracting parties and third parties: non-performance and insolvency. Spanish Abstract: Este articulo examina la problematica juridica que suscitan las clausulas contractuales que contienen referencias a terceros, en particular, las que aluden a competidores o rivales de las partes contratantes para regular distintos aspectos de la relacion contractual. La utilizacion de este tipo de clausulas se ha multiplicado con el desarrollo de los mercados plataforma y el comercio digital en internet. Tras analizar la logica economica que suele inspirar estos terminos contractuales, particularmente sobre el precio, se consideran aquellos supuestos en los que las circunstancias relativas a los bienes/servicios objeto de contrato y la posicion de las partes contratantes en el mercado pueden hacer que estas clausulas tengan un impacto negativo en el bienestar social y se consideren ilicitas.

The ‘No-reading’ and Consent in Online Consumer Standard Form Contracting

Like transactions in the paper world, online consumer transactions are dominated by standard form contract terms. The online era has brought with it various mechanisms of entry into agreements, including shrink wrap, click wrap and browse wrap agreements. With increasing alacrity, consumers are mouse-clicking their way into standard form contracts on the internet. A major challenge with the otherwise called online contracts of adhesion is the perception that consumers do not often read or understand the fine-print terms and this makes it difficult to identify the requisite “meeting of the minds” or “mutual assent” of contract formation. When confronted by a lengthy and incomprehensible standard form contract, the response of many, if not most, consumers is to click “yes”’ – without reading the contract or giving it careful consideration. The paper examines how case law responds to the issues of no-reading and assent in an online consumer standard form environment. The paper recommends some practical guides for implementation of technique of legal agreements in the light of case law. Keywords : consumer, standard form contract, terms and conditions, no-reading, assent DOI : 10.7176/EJBM/11-17-02 Publication date :June 30 th 2019

Learning in Standard Form Contracts: Theory and Evidence

We explore learning and change in standard form contracts. We hypothesize that drafters (sellers) are more likely to revise the terms they offer when they have an opportunity to learn about their value. These opportunities arise only for those types of terms that allow drafters to experience the relative costs and benefits of offering them. Consider a warranty. Sellers offering a warranty in an initial period will be exposed to claims about malfunction by purchasers and will learn whether it is desirable to offer it going forward. When drafters are unable to learn, either because they fail to offer such learning-enabling terms initially, or because the term in question is one where there is no increased opportunity to learn, we expect that such terms will be revised less frequently. Indeed, a reduced opportunity to learn might create contractual “black holes,” where terms that are less likely to be revised might lose their meaning over time or appear less related to the rest of the contract. Our results support this hypothesis. Using a large sample of changes in consumer standard form contracts over a period of seven years, we find that sellers are more likely to revise terms that offer an opportunity to learn than those that do not. The results suggest that standard form contract terms evolve over time as sellers learn about their benefits, costs, and risks. Our results have normative implications for the design of default rules.

Three Modes of Regulating Price Terms in Standard-Form Contracts: The Israeli Experience

Regulation of the content of standard-form contracts usually focuses on the invisible terms that customers hardly ever read. It does not refer to the price, because price is a salient component of the transaction, to which customers usually pay attention and sometimes even compare between suppliers. However, it is often difficult to draw the line between the price and price-related, invisible terms.

The Artificially Intelligent Internet of Things and Article 2 of the Uniform Commercial Code

The rise of artificial intelligence and the Internet of Things (IOT) has significant implications for consumers. Examples of artificially intelligent IOT products include the Nest thermostat which uses some degree of artificial intelligence to learn and adjust the temperature and energy use in a home based on the consumer’s preferences. Artificial intelligence will also play a crucial role in IOT self-driving cars. As IOT devices that utilize artificial intelligence become smarter and more autonomous, several established areas of law will be challenged. This book chapter explores the various contracting and agency issues raised by such devices, including “Contract Distancing” and the impact of standard form contract terms, such as unilateral amendment provisions.

Unfair contractual terms in standard form contracts under Colombian Law

Unfair contractual terms in standard form contracts under Colombian Law

Protecting Consumers from Unfair Terms in Standard Form Contracts: The UK Approach

This article examines the current UK consumer protection regime specifically relevant to unfair terms in standard form consumer contracts, as provided for by the Unfair Terms in Consumer Contracts Regulations 1999 (pursuant to the European Union's Council Directive 93/13/EEC) and the solid body of case law that has grown around it. In particular, the article takes a closer look at the decision in Office of Fair Trading v. Ashbourne Management Services Ltd [2011] EWHC 1237 (Ch) and its impact on protecting UK consumers who enter into standard form gym club contracts.

Online Cross-Border Consumer Transactions: A Proposal for Developing Fair Standard Form Contract Terms

Online consumer sales are growing at a substantial rate. An estimated 45% of online purchases by consumers in Australia are from overseas sellers, including US sellers. The question whether these transactions are governed by the Australian Consumer Law (ACL) is examined. The conclusion drawn is that cross-border transactions are usually governed by the ACL – at least in theory. In practice a consumer will invariably confront a bewildering array of procedural complexities and face prohibitive costs. US law and standard form terms are generally less favourable to consumers than Australian and European laws. There also appears to be an increasingly pro-seller bias developing in US standard form terms. The article considers why this is so. Why, for instance, are market forces not operating to provide incentives for the development of party balanced terms? The article then considers ways in which the interests of consumers can be better protected and enhanced regarding cross-border online transactions. It is proposed that a series of standard form 'Fair Terms' which could be made freely available on the Internet for parties to voluntarily incorporate into their contracts should be developed. This proposal follows the lead provided by developments for international commercial transactions. The article concludes by suggesting starting points for the development of fair terms provisions.

Does Contract Disclosure Matter?

Disclosure has long been the preferred regulatory approach to prevent one-sided standard-form contract terms, but its efficacy is unclear. For disclosure to be effective, it must increase readership of contracts and, conditional on reading, affect decisions. I use clickstream data on software shoppers to test these two conditions in the online context. I find that the prominence of disclosure of a software license agreement has little effect on readership. Moreover, those who read the license are equally likely to purchase the product regardless of its one-sidedness. Mandatory online disclosure regimes thus seem unlikely to impose competitive pressure on sellers. (JEL: K12)

Does Disclosure Matter?

Disclosure has long been the preferred regulatory approach to curtail one-sided standard form contract terms. Examples include the Truth in Lending Act, the new ALI Principles of the Law of Software Contracts, and many other proposals which await Congressional approval. The appeal of disclosure is that it is relatively low cost, improves consumer decision-making and preserves consumer choice. For disclosure to be effective, however, it must increase readership and understanding of contracts to a meaningful rate, and, conditional on readership, contract content must be relevant to purchase decisions. This paper tests both these necessary conditions. We follow the clickstream of 47,399 households to 81 Internet software retailers to measure contract readership as a function of disclosure. We find that making contracts more prominently available does not increase readership in any significant way. In addition, the purchasing behavior of those few consumers who read contracts is unaffected by the one-sidedness of their terms. The results suggest that mandating disclosure online should not on its own be expected to have large effects on contract content.