Volume 15, Issue 2 - Special Issue on the ALI Restatement on Consumer Contract Law from a European Perspective

The draft of the American Law Institute’s Restatement of Consumer Contracts reflects the jurisdiction of the US courts on the ‘adoption’ (as the draft calls it) of standard contract terms into consumer contracts. This draft is of great value to European lawyers in understanding US developments, but it may also stimulate a reflection on the state and possible evolution of European legal systems. It turns out that in the United States, as in Europe, the law on the adoption of standard contract terms is still heavily influenced by cases from the pre-digital and paleo-digital era. This article explains the rules of the Restatement for the adoption of standard contract terms, tests their functionality, in particular using the example of websites, makes some drafting suggestions and puts forward a proposal for the further development of the law on the adoption of standard contract terms of websites. The adoption of standard contract terms governing the use of a website should not require that consumers receive a notice of the standard contract terms prior to entering that website. The requirements for the adoption of standard contract terms should be seen as mainly, if not only, having the purpose of pinpointing the wording of a contract for later reference if necessary.

This paper gives a birds’ eye view on the ALI Restatement on Consumer Contracts (proposal) and European, and partly also Member State, law of standard contract terms with respect to the environment where these standard contracts and assent to them appears to be particularly fleeting, namely in digital contexts. It does so, however, with a broader scope: It tries to explain why assent rules are not meaningless even in a world where most consumers and customers do not read standard contract terms, and it tries to explain how lessons could be deduced also for a meaningful and more differentiated fairness control. It argues that favouring intervention of control (ie information) intermediaries – such as consumer associations – is key and that the preservation of possibilities for negotiation should be maintained and valued. In these respects, the paper is inspired in good part by company law and capital market law dealing with parallel problems.

Not all contract terms pose the same perils for efficient contracting and for consumer welfare. EU Law and the laws of many Member States make a distinction between core and non-core contract terms and tend to exempt the former from the ex-post substantive unfairness review to which the latter are subject to. By reviewing how the CJEU and European legal commentators have justified and construed the terms of Art. 4(2) of Directive 93/13 we may obtain a general picture of the analytical underpinnings deployed to provide useful content to that provision. The prevailing European approach is (unsurprisingly, perhaps) predominantly legalistic and uninterested in empirics. The CJEU analysis remains (unsurprisingly, perhaps) immune to the implications from the theoretical and empirical literature that economics and Law & Economics has produced in order to understand how market forces and other non-legal incentives for contract quality interact with ex post controls implemented by courts and based on broad legal standards. The ALI Restatement on Consumer Contracts may cogently make use of that input in crafting a less formalistic legal regime.

The Unfair Contract Terms Directive (UCTD) and the Common Law doctrine of unconscionability in the United States both pursue the same aim: they seek to protect consumers against abuse of power by traders who are in a position to exploit the asymmetry of the contracting process. However, both sets of rules rest on different premises. In particular, they allocate trust differently between courts and markets. This accounts for deep-running differences despite apparent similarities. This contribution analyses these similarities and differences by commenting on the unconscionability doctrine as expressed in the Draft Restatement of consumer contracts from a European point of view.

The need to protect weak parties from unfair standard contract terms does not only exist in b2c relationships, as one could at first sight believe. In business contracts also, entrepreneurs and other professionals can be subservient to their counterparty. Accordingly, this may result in an asymmetrical situation posing the same problems that are usually addressed in consumer contracts. On the grounds of these introductory considerations, this paper aims at analysing the problem from a European point of view, with special attention to the Italian legal system. A variety of different solutions – depending on the single rationales of the different legal systems at issue – emerges, offering de iure condendo a good starting point for a fresh and novel pragmatic approach.