Fairness in Electronic Contracting Minimum Standards for Non-Negotiated Contracts

Abstract

Despite much discussion and controversy in the years since ProCD v. Zeidenberg was decided, there has been an increasing use and acceptance of shrinkwrap, clickwrap, and browsewrap contracts and licenses as a means of conducting modern-day commerce. Yet even the strongest proponents of electronic contracting agree that fundamental fairness requires some limits on the terms that will be enforced in such contracts of adhesion. This paper suggests that the usual U.S. standard of unconscionability is too high a bar to provide reasonable consumer protection in this context. The E.U. Directive on Unfair Contract Terms is a well-developed alternative to the U.S. approach that provides greater certainty for both parties, as well as greater protection for the customer. Less comprehensive, but still a useful starting point in thinking about a more pro-active U.S. approach is the Stop Before You Click campaign developed by a group concerned about fairness in electronic contracting. Terms that may surprise a customer, cause undue hardship, or override other important public policies should not be part of a non-negotiated contract. The twelve principles of Stop Before You Click form a good basis for either minimum contract standards for non-negotiated contracts or for a new series of consumer protection laws designed to prevent over-reaching in electronic contracts.