Consumer Contracts Posts
Twenty-three State Attorneys General circulated a letter urging Members to withhold support from the Restatement of the Law, Consumer Contracts. The criticism expressed in the AGs’ letter is founded on a misunderstanding of the rules in the draft Restatement.
In this week’s podcast episode of Reasonably Speaking, consumer contract experts Omri Ben-Shahar and Florencia Marotta-Wurgler discuss several types of consumer contracts, enforceability of terms, and the potential consequences of agreeing to these terms without reading the fine print.
Last fall, the ALI Council approved Council Draft No. 5 of the Restatement of the Law, Consumer Contracts, for submission to the members at the ALI Annual Meeting in May 2019, subject to the discussion at the Council meeting and the usual editorial prerogatives. The Reporters are now working on the draft to be presented in May.
Empiricism and Privacy Policies in the Restatement of Consumer Contract Law and The Faulty Foundation of the Draft Restatement of Consumer Contracts
“Empiricism and Privacy Policies in the Restatement of Consumer Contract Law” (Empiricism) asks the wrong question and takes the wrong approach to answering that question. A second article in same issue of the Journal, “The Faulty Foundation of the Draft Restatement of Consumer Contracts” (Faulty Foundation) has similar flaws. Both articles misconceive and overstate the role of “counting” in the preparation of the Restatement, as the Reporters emphasize that the Restatement follows the traditional ALI approach, which is based on a broad review of court decisions.
During its meeting in New York City on October 18 and 19, the ALI Council reviewed drafts for seven Institute projects. Drafts or portions of drafts for six projects received Council approval, subject to the meeting discussion and to the usual prerogative to make nonsubstantive editorial improvements.
In the defining decision, Cullilane v. Uber Technologies, the First Circuit Court of Appeals reversed a district court’s grant of Uber Technologies’s motion to compel arbitration and dismiss the complaint of a putative class action brought by users of Uber’s ride-sharing service in the Boston area. At issue in the case was the enforceability of an online contract’s arbitration clause. This decision strongly reinforces the notion that online contract processes should be designed, and the information arranged, for consumers and with extreme attention to detail and a focus on clarity of meaning.
At its meeting in Philadelphia on January 18 and 19, the Council reviewed drafts for several projects, with the following outcomes:
Ninth Circuit Deems Amazon’s Conditions of Use Enforceable, Plaintiff’s Deceptive Pricing Claims Arbitrable
The Ninth Circuit’s no-nonsense decision recognizes that, under basic principles of contract law, online consumer contracts may be enforced so long as notice is conspicuous and acceptance is unambiguous. It is an important win not only for but also retailers generally.
Second Circuit Issues Important Decision Regarding Online Contract Formation and Arbitration Agreements
Last year, the Southern District of New York refused to enforce Uber’s Terms of Service because it believed that the agreement’s placement was inconspicuous and the consumer’s acceptance was ambiguous. Last week, the Second Circuit vacated that order and found that the agreement had been reasonably disclosed and unambiguously accepted.
The Consumer Financial Protection Bureau has issued a final rule “governing the use of pre-dispute arbitration agreements by providers of consumer financial products and services.”