Unfair terms in comparative perspective: Software contracts

The phenomenon of unfair terms in mass-market contracts is widely acknowledged, as is the fictional nature of “assent” or “consent” to all but a few obvious terms, such as price and key product features. Although some still argue for facilitating choice through better disclosure and education of customers, most policymakers, regulators, and scholars concede that there often can be no real assent to mass-market standard terms, but then balk at meaningful solutions to address market failure. The problem of nasty standard terms is seen as intractable. A good example of recognition of the problem of unfair terms but reluctance to provide effective remedies is the recent project of the American Law Institute - the Principles of the Law of Software Contracts. The Principles address every issue raised by the coalition of software customers concerning unfair terms and practices, but they rely too heavily on after-the-fact judicial policing using broad standards and do not call for administrative prevention or enforcement. The Principles thus are mostly symbolic, although in several places they propose meaningful commands and in others they use illustrations to target specific suspect terms. Overall, they suggest some important ways to make software contracts fairer and succeed in making the point that policing of terms is more tractable if done industry by industry, with attention to particularities, but they stop short of a workable implementation strategy.