Messy Contracts

This Article is the first to empirically examine whether firms draft well-organized online contracts that consumers can easily read, navigate, and analyze. “Messy Contracts,” as this Article dubs them, are contracts that lack organizational signals in the form of a table of contents and informative headings. Analyzing the sign-in-wrap agreements employed by the most popular 100 websites—such as Google, Facebook, LinkedIn, TikTok, Walmart, Twitter, Instagram, YouTube, and Amazon—this Article finds that businesses routinely draft messy contracts.

The importance of this finding goes beyond what initially meets the eye. Messy contracts (1) reduce consumers’ comprehension; (2) impose excessive cognitive costs on consumers, consumer advocates, watchdog organizations, and adjudicators who wish to read or navigate the contract or part of it; (3) undermine consumers’ ability to remember the contracts’ content, and (4) deter consumers from reading contracts. Furthermore, messy contracts indicate that competition over contract terms is lacking and that firms can utilize the features of the online environment to draft consumer contracts without accounting for consumers’ needs more generally. Alarmingly, messy contracts may also denote that term ignorance may drive consumers’ assent. In all, messy contracts facilitate exploitation, often harming the most vulnerable consumers.

Part II of this Article provides the theoretical background to messy contracts. It contextualizes the problem of messy contracts, linking them to the ‘no-reading’ problem and delineating their social costs. Part III contains the empirical test of this Article. It discusses the sample contracts, the empirical methodology, and our results. Against this background, Part IV considers the normative implications of messy contracts, suggesting ex ante regulatory measures and ex post judicial scrutiny. It also acknowledges the limitations of our proposals and replies to key critiques.

* Professor of Law, College of Law and Business. J.S.D. (UC Berkeley); LL.M (Columbia University).

** Professor of Law and Associate Dean of Research, Victoria University of Wellington. J.S.D., LL.M (Yale University); Lee Kong Chian Visiting Professor of Law, Singapore Management University. We thank Yonathan Arbel, Chris Drahozal, Avigail Faust, Helena Haapio, Grace Henry, Dave Hoffman, Amy Schmitz, Roy Shapira, Jeff Sovern, Rob Waller, and Alexander Wulf for excellent comments on earlier drafts, Tzur Grossman for able research assistance, and Victoria University of Wellington and the College of Law and Business for generous financial support.

The full text of this Article is available to download as a PDF.