The Darth Vaders of Business Law

From CounterPunch, consumer advocate and presidential candidate Ralph Nader writes an open letter to corporate business lawyers:

You spent just one or two classes on what are called "contracts of adhesion"—those fine print one-sided contracts that only make up 99% of all the contracts we'll ever sign.

There they are—page after page exuding the silent message of "take it or leave it." If you "leave it", then you must cross the street to a competitor—an insurance company, credit card firm, bank, auto dealer, hospital, realtor, airline, student loan company or cell phone company, awaiting you is the same fine-print contract designed to nail you to the mast. Then there are the shrink-wrap software contracts you can't even see before you buy.

And

You misuse your intellect to create a modern contract straitjacket that gets tighter year by year. Your innovations are enforced by status-quo judges, credit ratings, credit scores and the absence of any competition over contracts between companies in the same industry.

The straitjacket is made of figurative steel fibers composed of enforceable words. Here is a partial list of your inventions which Harvard Law Professor Elizabeth Warren aptly calls "mice type" the equivalent of "shrubbery for muggers!"

They include (1) seller's power to unilaterally change terms or assign the contract, (2) waiver provisions of the seller's liability and payment of seller's attorney fees, (3) acceleration and delinquency clauses, (4) binding arbitration and blocking the consumer's resort to the courts and right to jury trials, (5) liquidated damage clauses. On and on go the layers of incarceration.

More here.

I got to see Nader speak back in 2000 when he was running for President. He was hitting on exactly this topic when he asked the audience to visualize the moment when you get your sales contract in hand down at the local auto dealership: imagine what would happen if you told the salesman that you didn't like this or that clause and that you wanted it removed from the standard form. Everybody laughed for a moment or two. All of us in the audience knew that such a thing was absurdly unthinkable: contracts, at least corporate contracts with consumers, are not negotiable. That is, if you want to buy it, or rent it, or retain services, you either sign the pre-printed stack of legalese, or you get nothing. And that's disturbing, because, to the best of my knowledge, pretty much all contract law assumes that contracts are, indeed, negotiable.

Here's an actual contract negotiation:



Okay, it's the Marx Brothers here, so it is, of course, absurd, but it is undeniably a negotiation. I, for one, did not get to wrangle with various aspects of the lease contract I recently signed for the apartment I just moved into, which is owned by a local Big Apartment Company. Like almost all consumer contracts in the United States, it was take it or leave it. I mean, I suppose if I looked hard enough, I could have found a place, probably a house or duplex, that was owned by an individual, a situation that often has enough wiggle room for some dickering, but if you're looking for an apartment, odds are you get the standard lease form, and that's that. Same thing with cell phones, cars, cable and internet service, and on and on. You sign these contracts, but they always favor the seller, never you, and it is impossible to negotiate for better terms.

I don't understand how we can even call this kind of paperwork a "contract." But that's the way it is in Corporate America: if you want to participate in society, you have to sign away your rights. Sooner or later the corporate state will shred the Constitution while Tea Party "constitutionalists" whoop and cheer.

The whole world's fucking crazy.

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