The Restatement of Consumer Contracts and Quantitative Caselaw Studies — Greg Klass

Post by Greg Klass

I hope those interested in contract law are aware of the ALI’s project for a Restatement of the Law of Consumer Contracts. It is a major undertaking, both in its attempt to synthesize existing law in this area and as a statement about how common law courts can best address business-consumer transactions.

There is a lot to say on the substance of current draft (which the ALI doesn’t seem to have on its website). The Reporters’ core move is give up on robust ex ante consumer assent—shrinkwrap and browsewrap are both ok, as are notice-only business-side modifications—and to protect consumers through stronger ex post judicial review for substantive unconscionability. I’m not sure this is the all-things-considered best way to go. Mandatory terms crafted by regulators might provide businesses more certainty and consumers more protection. The Reporters’ approach might be the best common law courts can do. But I worry that enshrining it in a Restatement could deter regulatory innovation. That said, I am a big fan of draft sections 6, 7 and 8, which together would limit businesses’ ability to integrate standard terms. The logic of the parol evidence rule falls apart when we know one side hasn’t read the writing in question.

Also interesting are the Restatement’s methodological innovations. The current draft includes results of six quantitative caselaw studies, each supporting of a rule or comment. These studies collect all cases on a question of law, code them for relevant features such as court, issue, outcome and citation counts, then analyze the coded data to look for majority rules, trends and leading cases.

I’ve done a deep dive into the Reporters’ study of judicial decisions on whether business privacy policies are enforceable in contract. The Reporters use the study to support a comment to the effect that such policies are typically contract terms. The move is a significant one, among other things because it would seem to tread on territory belonging to the ALI’s separate Principles of the Law of Data Privacy project.

I’ve just posted on SSRN a draft article with my results. The short version: I find considerably less empirical support than do the Reporters for the current draft’s statements on privacy policies.

Equally interesting (to me at least) are broader questions about method and the value of quantitative caselaw studies of this type. My results suggest the importance of transparency and replication when doing quantitative caselaw studies. Coding cases often involves difficult judgment calls, and the numbers quantitative studies generate do not tell us about the many individual interpretive decisions that lie behind them. Thus the advantage of sharing data and coding, and other scholars attempting to replicate a study’s results.

I say a few words in the draft about whether the ALI’s Restatement process is suited to the production of reliable quantitative caselaw studies. As interesting, though not in the draft, are the limits of positivist projects in interpretive fields (think Dworkin) such as the law.

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