Whether you’re subscribing to a dating app, getting a gym membership, visiting a website or purchasing a product, you’re probably entering into a consumer contract. As widely used as these agreements are, people rarely read, understand, or know the content of them. Although there are some government regulations, contract law generally treats online “terms as conditions” to be binding contracts for people who agree to buy, subscribe, borrower, join, or download.

In her forthcoming article, The Shape of Consumer Contracts, Andrea Boyack, the Floyd R. Gibson Endowed Professor of Law, says that people’s choice to do business with a company shouldn’t be treated as their choice to be bound to all of that the company’s online rules.

Thanks in large part due to the rise of the internet, the length and complexity of consumer contracts has increased. Traditionally, consumer contracts could fit on a couple of printed pages. Today, there’s no tangible limit to how long and complicated online terms can be.

Boyack argues that consumer agreement to complex boilerplate terms that don’t affect their purchasing of a product or service (but only purport to waive or limit consumer legal rights) should require more than simply buying a product or browsing a website.

“Consumer contracts are the types of contracts that we enter into all the time,” Boyack said. “Almost always, the consumer is not the one drafting the contract. Even though we are acquiring the goods, services, subscriptions or employment all within a legal context, we have no ability to influence the content of these agreements through negotiation.”

Historically, contracting parties were more evenly situated to negotiate and come to an agreement based on mutually acceptable terms, which Boyack refers to as a “horizontal” relationship. In today’s digital realm, however, where a lengthy set of terms completely within the control of one party and imposed on the other party as the “price of doing business,” Boyack sees the company-consumer relationship more of a “vertical” one — where companies have all of the control and consumers are often times required to give up their fundamental legal rights to purchase a product or service.

“The two main justifications for enforcing contracts are economics and agency, which is the idea that we should let people choose their own agreements,” Boyack said. “If people are bound to a company’s standard terms based on simply who they are — for example, an employee or subscriber — they aren’t really choosing the terms. The economic justification for enforcing these terms is based on their reflection of a win-win transaction. But if in addition to paying money for a service, one party is getting value (for example, liability protection) in exchange for the other party’s getting nothing, that’s not a win-win transaction; it’s just a transfer of wealth.”

Boyack suggests two changes to modern contract law with respect to “vertical” relationships:

1. The law should first untangle the choice to engage in a transaction and the blind commitment to boilerplate terms.
2. Then the law should refuse to treat the choice to engage in a transaction as deemed assent in those boilerplate terms that exist only to reduce consumers’ default legal rights.

Boyack’s suggested framework would allow people to take a more active role in their consumer contracts. This framework would allow consumers to contract for a product or service without agreeing to every provision in a company’s extensive boilerplate terms. Her approach would protect consumers’ basic legal rights, including the right to litigate disputes and obtain legal damages.

“When I worked in private practice, I represented big companies — never ordinary people,” Boyack said. “One of the reasons I wanted to go into academia after the Financial Crisis and recession in 2008 was to give voice to the people that didn’t have a voice in our system, of which contract law makes up a big part. I want them to be able to retain their legal rights when contracting for products and services more broadly.”

Editor’s note

Part one of “The Shape of Consumer Contracts” is to published in Denver Law Review in the next few months. Boyack’s follow-up article, Abuse of Contract, is planned for 2024.