Our contracts courses are based on mythology. The Book Of Genesis for contracts goes a little something like this:
“In the beginning, humans made deals with one another. When there is a true ‘meeting of the minds,’ humans shake hands, and the courts enforce that as a binding contract. Contracts make both parties better off by allocating goods efficiently between the two parties, thereby creating value. If John has 5 bushels of wheat, and Jane has 5 gallons of milk, each has too much wheat or milk to consume by themselves, respectively. John contracts for some of Jane’s milk, Jane contracts for some of John’s wheat, and thereby the excess of wheat and milk is no longer excess, by utilized to its fullest extent. Voila, value is created.”
It’s a nice story. Unfortunately, this mythology little resembles contracts today. The overwhelming majority of today’s contracting looks a bit different:
“John goes online to buy something. A box pops up asking him to read ‘terms and conditions.’ This pages-long collection of fine print is full of legalese, including terms like unilateral modification, so the seller can alter the contract in any way they choose. Jane’s contract for her gym membership includes a waiver of the gym’s liability for negligence, robbing her of her right to sue in tort. John’s employment contract includes a mandatory arbitration clause, robbing John of his day in court should something go wrong—and if he somehow does make it to court, the forum selection clause provides that he’ll have to litigate in Delaware, rather than Montana, where he lives and works.
John and Jane are party to thousands of these contracts throughout their lifetimes, often multiple times a day. They have contracted away most of their rights against most companies they’ve engaged with. One day John and Jane get a lawyer to read some of this fine print for them (they don’t normally read it themselves) and they are appalled. They start trying to choose carefully where they make contracts, but it turns out they have no alternative contracts to choose from that don’t strip them of their rights.”
The vast majority of contracts today rob consumers of their rights in court through fine print and legalese, and consumers have no ability to get around these contracts if they want to participate in society. As Professor Lessig put this crisis in these terms, “The law has allowed a very basic idea—that humans might come to an agreement—to morph into an embarrassment for law and injustice for too many.”
In HLS’s contracts classes we’re taught about the consumer’s “duty to read,” and we read arcane doctrine about calculating damages. If we touch on boilerplate contracts, it is all in one lecture that hardly gives a sense of the magnitude of the crisis in contract law. Above all, we’re taught about the importance of freedom of contract. But “freedom of contract” is, for the most part, a myth in our society. It is true that we are “free” to not participate in these contracts that rob our rights, in the same way we are “free” to let ourselves starve, and “free” sleep under a bridge.
These contracts—that companies create knowing consumers have no other options and won’t be able to read them—are themselves, as Professor Margaret Jane Radin argues, a new type of tort perpetrated on the consumer: “intentional deprivation of basic legal rights.” If citizens cannot meaningfully participate in society without being robbed of their legal rights through contract, then contract law is a cruel joke.
Harvard Law’s mission statement, “to educate leaders who contribute to the advancement of justice and the well-being of society,” is similarly farcical if our contracts classes don’t seriously address this crisis in contract law. I hope our new dean takes this issue seriously and plans to equip HLS students with the knowledge they need to address the state of contract law today.
Martin Drake is a 2L at Harvard Law School.