In the Public Interest By Ralph Nader
It is time to shine the light on the big, affluent corporate lawyers who anonymously create those non-competitive fine print contracts we all have to sign to purchase goods and services.
It’s time for an open letter to these Darth Vaders of business law who have destroyed our freedom of contract and built a new road to serfdom made of corporate cement.
Dear Attorneys for Contract Incarceration:
Remember when you were at law school studying contracts? Your professor pressed you socratically to understand Hadley vs. Baxendale et al. You spent just one or two classes on what are called "contracts of adhesion"—those fine print one-sided contracts that only make up 99% of all the contracts we’ll ever sign.
There they are—page after page exuding the silent message of "take it or leave it." If you "leave it", then you must cross the street to a competitor—an insurance company, credit card firm, bank, auto dealer, hospital, realtor, airline, student loan company or cell phone company, awaiting you is the same fine-print contract designed to nail you to the mast. Then there are the shrink-wrap software contracts you can't even see before you buy.
If your contracts professor bothered to explain why so little course time is spent on these standard form contracts involving trillions of dollars in annual sales, he/she might have used the French phrase—"fait accompli." After all, the consumer signed or acquiesced in some way. That met the basic principle of a binding contract, say the courts (with a rare exception now and then) which is a meeting of the minds between the willing seller and the willing buyer.
Discussion over! As a shopper, prepare for the daily coercive harmony.
Imagine all the times you’ve "met the minds" of Bank of America, Metropolitan, Aetna, General Motors, Wal-Mart, American Express, AT&T, Sallie Mae, U.S. Air and your favorite time-sharing company for that vacation trip to Antigua. What a myth!
In this legal fiction land, the law presumes that you’ve read the fine print and understood it. Inscrutability is no defense. It doesn’t matter that law professors, Supreme Court Chief Justice Roberts and your partners admit to not reading the dense legalese when they shop. Why waste their time? They can’t get out of contractual prison anymore than you can. But you make zillions figuring out how to lock millions of Americans into one-side anti-consumer contracts.
You misuse your intellect to create a modern contract straitjacket that gets tighter year by year. Your innovations are enforced by status-quo judges, credit ratings, credit scores and the absence of any competition over contracts between companies in the same industry.
The straitjacket is made of figurative steel fibers composed of enforceable words. Here is a partial list of your inventions which Harvard Law Professor Elizabeth Warren aptly calls "mice type" the equivalent of "shrubbery for muggers!"
They include (1) seller's power to unilaterally change terms or assign the contract, (2) waiver provisions of the seller's liability and payment of seller's attorney fees, (3) acceleration and delinquency clauses, (4) binding arbitration and blocking the consumer's resort to the courts and right to jury trials, (5) liquidated damage clauses. On and on go the layers of incarceration.
Pretty clever maybe, but, you aren't being fair to the powerless consumers. Remember, you've got a professional code of ethics that informs you of the obligation sometimes to say no—enough already—to your demanding corporate clients even if they can always go to another law firm that they can pay handsomely to say yes. It can be, for you, a dilemma.
Listen, I've got an exit plan for those of you pondering quitting or retiring because you can no longer stand destroying peoples' freedom of contract—one of the main pillars of our democracy—with their consequential losses of money, time, health and safety.
Come to the other side. A movement for consumer contract justice is heading your way. Don't laugh as General Motors once did in the Nineteen Sixties. Don't think that the complexity of these fine prints cannot be communicated to the buying public. ABC's Peter Jennings showed the opposite with a crisp five part TV series a few years ago. This fall, a sure best seller by David Cay Johnston titled "The Fine Print" is coming out. He has prior best sellers on tax laws that clarify the abstruse to arouse readers.
There is a huge compression of repression and resentment ready to be unleashed and converted into a widely perceived injustice. Ridding themselves of the feeling that "that's the way it is," this consumer uprising will be holding you and your companies responsible by name.
Quit and join the right side of the coming historical change breaking the chains of contract bondage. Bring your knowhow and stored archives (names redacted) of "mice type" to faircontracts.org, directed by the relentless lawyer, Theresa Amato. Soon!
Your brother in law,
Ralph Nader, Esq.