Robert A. Hillman

Online Boilerplate: Would Mandatory Website Disclosure of E-Standard Terms Backfire?

This article analyzes whether mandatory website disclosure of e-standard terms, advocated by some as a potential solution to market failures when consumers contract over the Internet, potentially may backfire. By mandatory website disclosure, I do not mean a clickwrap presentation of terms, in which a consumer must click I agree or the like on a screen presenting the terms prior to the completion of a transaction in progress. Mandatory website disclosure would require a business to maintain an Internet presence and to post its terms prior to any particular transaction. The problem is not that website disclosure would increase the cost of doing business, which would be passed on to consumers in the form of higher prices. Businesses have been unable to demonstrate that displaying their terms on their websites would be costly. Nor should drafting rules that implement the law be too difficult. Businesses could be required to display their terms on their homepage or on another page reachable directly through a clearly identified hyperlink. Further, businesses could be required to prove the availability of their terms by furnishing relatively inexpensive archival records of their websites. Website disclosure may backfire, however, because it may not increase reading or shopping for terms or motivate businesses to draft reasonable ones but, instead, may make heretofore suspect terms more likely enforceable.

Principles of the law of software contracts

An overview of a new set of legal principles for software contracts developed by the American Law Institute.

Rethinking Consideration in the Electronic Age

Our fast-paced age of electronic agreements that ostensibly govern transactions as diverse as downloading software, ordering goods, and engaging in collaborative development projects raises questions regarding the suitability of contract law as the appropriate legal framework. While this question arises in many settings, we focus here on the free and open source software (FOSS) movement because of the maturity and success of its model and the ubiquity of its software. We explore in particular whether open source licenses are supported by consideration, and argue that they are, and that open source licenses are contracts. We further argue that a contractual framework working in tandem with the intellectual property laws is the appropriate legal structure to govern FOSS transactions. Our discussion holds implications for the understanding of consideration doctrine and contract law generally outside of the FOSS example and, indeed, for collaborative development and electronic agreements generally. The article is thus an exercise in understanding consideration doctrines past and future.

Contract Excuse and Bankruptcy Discharge

A wide gulf presently separates our two primary doctrines for relief from promissory obligation-contract excuse1 and bankruptcy discharge. On the one hand, contract law rarely excuses promisors.2 The traditional wisdom holds that an expansive view of excuse compromises freedom of contract, and judges have no business interceding in peoples private affairs.3 Moreover, people make contracts precisely to wager on the future, and excusing obligations subverts this aim.4 Granting excuse liberally would make people wary of entering contracts, to societys detriment.5 Proponents of the miserly approach to excuse add that we should not feel too charitable towards a promisor who foolishly or mistakenly enters a contract: Once parties make agreements, they should perform.6 Accordingly, contract courts rarely excuse promisors, even when a catastrophe makes performance extremely onerous. Notwithstanding academic writing that reports or urges expansion of the grounds of excuse, courts actually remain extremely reluctant to release parties from their obligations.7 Bankruptcy, on the other hand, liberally discharges individuals to afford

Defending Disclosure in Software Licensing

For lack of our imagination, this article does not have the most scintillating title. However, the subject matter is critically important. We survey prominent kinds of disclosures in law and show why the disclosure tool, though subject to substantial criticism, is central to the legitimacy of any legal regime. Our working example is the American Law Institute’s “Principles of the Law of Software Contracts” (hereinafter “ALI Principles”). The ALI Principles include three kinds of disclosure: disclosure of facts (concerning the quality of software), disclosure of terms (of standard forms), and disclosure of post-contract intentions (to pursue remote disablement of software). We take each up respectively in the three sections that follow and show how these forms of disclosure promote important social values and goals.

Modern Contract Law and the Limits of Contract Theory

This book has surveyed, analyzed, and critiqued various modern theories of contract law. My goal in each chapter was to compare the principal insights and perspectives of two largely contrasting theories in order to find possible areas of agreement and to construct a consensus or pluralist thesis. Ultimately, I argue that this synthesizing thesis constitutes the most persuasive account of contract law’s nature and functions.

Theories of Contract: Promise and Non-Promissory Principles

The tension between freedom of contract and non-promissory principles such as reliance and unjust enrichment, which legitimize judicial intervention in agreements, preoccupies many contract analysts.1 Among the subjects of this book are several distinct theories emphasizing one approach or the other. This chapter, for example, compares Charles Fried’s promise theory and Grant Gilmore’s hypothesis of the “death-of-contract.”2 Professor Fried posits that freely made promises of contracting parties constitute contract law’s core, whereas Professor Gilmore insisted that non-promissory principles “swallowed up” private contract law. The debate is not merely descriptive. Promise theorists champion individual choice and urge government not to intercede in private relations. Death-of-contract analysts, on the other hand, support the use of non-promissory principles to assure fairness in the contracting process.

Theories of Empiricists and Relationalists

Some analysts have concluded, on the basis of empirical studies, that business people often ignore contract law, which is largely irrelevant to the business world. In this chapter, I first consider this thesis. I then turn to the relational perspective, which helps explain the empirical findings. Relationalists posit that contract doctrine’s focus on specific or “discrete” promises makes it unsuitable to govern most modern business arrangements, which are characterized by cooperation, flexibility, and willingness to adjust terms, not adherence to precise promises. Although the theories of empiricists and relationalists of contract law are thus compatible, they also contrast in important ways. For one thing, many empiricists, whose studies suggest the irrelevancy of contract law, ultimately acknowledge its importance. For another, recent empirical findings cast doubt on the irrelevancy and unsuitability theses. Building on these findings, I conclude that contract law continues to be important and adaptable to the needs of a relational world.

Theories of Contractarians and their Critics: Marriages and Corporations

Legal scholars increasingly utilize contract “paradigms” or models to analyze diverse relations such as marriages, corporations, creditors and debtors, and private associations.1 For example, many marriage theorists assert that distinct social norms no longer govern the conduct of marriage.2 Mandatory state laws regulating the family unit, grounded on general societal norms, are therefore antiquated. The obsolescence of these norms requires a new theoretical structure to govern marriage.3 Some marriage theorists have set forth a contractarian model to accommodate the idiosyncratic norms of individual marriages. The model recognizes and enforces private agreements made between spouses during marriage, governing marriage support, dispute resolution, lifestyles, or even marriage duration.4 The model offers a rationale for protecting the economic and social interests of the disfavored spouse under existing state law, typically the wife.5

Theories of Economic Analysts of Contract Law and their Critics

Economic analysis of law has increased in importance and influence at least since Ronald Coase published The Problem of Social Cost in 1960.1 Legal economics fills a void resulting from the demise of other movements, such as formalism and realism.2 By introducing a social science into legal analysis, legal economics also excites theorists dissatisfied with what they believe to be the tunnel vision of traditional legal inquiry.