Boilerplate: The Foundation of Market Contracts by Omri Ben‐Shahar (ed.)
| DOI | http://doi.org/10.1111/j.1468-2230.2009.00738.x |
| Author | David Collins |
| Date | 01 January 2009 |
| Published date | 01 January 2009 |
REVIEWS
Omri Ben-Shahar (ed.) Boilerplate: The Foundation of Market Contracts,
Cambridge: Cambridge University Press, 2008, 210 pp, pb d17.99 .
Boilerplate:The Foundation of Market Contracts is a collection of ¢fteen short articles
mostly from American scholars on issues relating to standard form contracts and
drawing upon theories of resource e⁄ciency in the law and economics tradition.
The underlying economic argument in favour of implementing standard form
contracts in commercial transactions is that they help parties minimize the trans-
action costs associated with bargaining. A commonly identi¢ed downside is that
intentionally obscure terms in complex transactions are often missed by unso-
phisticated consumers and consequently courts should strike them down for the
sake of fairness. An often unobserved ancillary problem is the unlikelihood that
any cost-savings on transactionswill necessarilybe passed on to consumers in the
form of lower prices, which appears to be presumed by contributors Marotta-
Wugler (45) and Hillman (83) in de¢ance of conventional economic theory.With
such economic sensitivities in mind, many of the book’s authors urge that the
court’s intervention in circumstances of one-sided consumer contracts is often
unjusti¢ed because selective ignorance is part of the bargained-for exchange. This
is a welcome recognition of the important, but often ignored, function that stan-
dard formcontracts can assume in, forexample, selection of consumers by sellers,
productdi¡erentiation by consumers, and discretionary enforceme nt of terms by
employees depending on the circumstances of breach.The exploration of these
vital hidden uses of boilerplate clauses, demonstrated most brilliantly in Gilo
and Porat’s chapter, o¡ers a compelling and unique insight which makes this col-
lection a valuable contribution to the debate on non-negotiated terms in the law
of contract. Their consideration of the implications of standard form contracts,
such as the facilitation of collusion, is also highly recommended to commercial
law scholars, although as in other chapter s, more concrete examples of actual
clauses and industry e¡ects would have completed the picture.
Some of the most fascinating sections of this book involve a behavioural
science analysis of consumer decision-making under imperfect information, or
‘bounded rationality’, to use a familiar phrase that the book does not. Johnston
observes that contracting parties employ simple rules of thumb to determine
whether breach should be forgiven when there are millions of clients as opposed
to only one or two (20). Hillman explains how the ‘speed and novelty’ of the
internet has changed the way sales are concluded becaus e of the perceived insig-
ni¢cance of a mous e click (as opposed to a traditio nal signature) (84^85) and how
the relative immediacy of the electronic transaction heightens the tediousness of
accompanying legalese (90). Mann notes that consumers have a diminished capa-
city to evaluate more than three sepa rate aspects of a product at a given time (10 9) a
r2009 The Authors. Journal Compilation r2009 The Modern LawReview Limited.
Published by BlackwellPublishing, 9600 Garsington Road,Oxford OX4 2DQ,UK and 350 Main Street, Malden, MA 02148, USA
(2009) 72(1) 130^155
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