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Free Agreement

Free Agreement. Richard Warner. Why Freedom Matters. Contracts are voluntarily undertaken obligations. No private party—person, business, or organization—can unilaterally impose an obligation on another private party.

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Free Agreement

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  1. Free Agreement Richard Warner

  2. Why Freedom Matters • Contracts are voluntarily undertaken obligations. • No private party—person, business, or organization—can unilaterally impose an obligation on another private party. • So if online agreements are contracts, consumers and website visitors must voluntarily agree to them if they are really contracts.

  3. Hennigsen v. Bloomfield Motors • The Hennigsens bought a car and the steering went out after 468 miles injuring Mrs. Henningsen. • When the Hennigsen’s sued, Bloomfield Motors claimed that the Henningsen’s had waived their right to sue.

  4. The Contract • “7. It is expressly agreed that there are no warranties, express or implied . . . except as follows: • The manufacturer warrants each new motor vehicle (including original equipment placed thereon by the manufacturer except tires), chassis or parts manufactured by it to be free from defects in material or workmanship under normal use and service.”

  5. Lack of Meaningful Choice • Lack of information: • The Henningsens did not read the contract. • Standard form agreement drafted by the Automobile Manufacturers Association. • Lack of options: • Take or leave it, no negotiation allowed. • No market option.

  6. Rakoff, Radin, Swartz/Solove • Todd Rakoff argues that standard form contracts generally are characterized by lack of information and lack of meaningful choice. • Radin and Swartz & Solove argue that online agreements are characterized by lack of information and lack of meaningful choice. • This problem has not particularly bothered the courts, which generally enforce such agreements.

  7. Unconscionability • Procedural unconscionability = lack of meaningful choice. • Substantive unconscionability = substantively unfair terms.

  8. Lack of Meaningful Choice • Gatton v. T-Mobile: entering a standard form, take it or leave it contract, is enough to satisfy the “lack of meaningful choice” requirement. • Lack of market options is not required. • Recall Hennigsen • Lack of options: • Take or leave it, no negotiation allowed. • No market option.

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