LAW & ECONOMICS WORKSHOP
presents
Professor Florencia Marotta-Wurlger
New York University Law School
Set in Stone?
Change and Innovation in Consumer Standard Form Contracts
Tuesday, February 26, 2013
4:10 – 6:00
Solarium (room FA2) – Falconer Hall
84 Queen’s Park
This article studies the rate, direction, and determinants of change in consumer standard form contracting. We examine what changed between 2003 and 2010 in the terms of 264 mass-market consumer software license agreements. Thirty-nine percent of contracts materially changed at least one term, and some changed as many as fourteen terms. The average contract became more pro-seller as well as several hundred words longer. The increase in length is not due to the use of simpler language. Contract readability has been constant: the average contract is as readable as an article in a scientific journal. The variance of contract length has grown, as has the variance in overall pro-seller bias, resulting in reduced contract standardization over time. Younger, larger, growing firms, and firms with in-house counsel were more likely to change existing terms and to introduce new terms to take advantage of technological and market developments. Contracts appear to respond to litigation outcomes: Terms that were increasingly enforced by courts were more frequently used in contracts, and vice-versa. The results indicate that software license agreements are relatively dynamic and shaped by multiple factors over time. We discuss potential consumer protection implications as a result of the increased length and complexity of contracts over time.
Florencia Marotta-Wurgler is a professor at New York University School of Law. Her teaching and research interests are contracts, electronic commerce, privacy online, law and economics, and commercial law. Her current research focuses on standard form contracting online. She has written on pay now, terms later contracts; online dispute resolution clauses; standard terms when sellers have market power; and related topics. Her current research documents extremely low readership rates of online standard form contracts and discusses associated regulatory implications, such as the effectiveness of mandatory disclosure regimes. She has testified about her research to the U.S. Senate Committee on Commerce, Science, and Transportation. She received a B.A. magna cum laude from the University of Pennsylvania and a J.D. cum laude from NYU School of Law. She is also a fellow at the Engelberg Center for Information Law and Policy at NYU School of Law.
For more workshop information, please contact Nadia Gulezko at n.gulezko@utoronto.ca.
