Consumers accessing goods and services online are inundated with numerous disclosures, privacy policies, end user license agreements and terms and conditions. In connection with the so-called “duty to read,” consumers have historically been presumed and expected to fully review contract terms as part of the contract-making process. Yet, as several scholars have observed, consumers do not appear to consistently review contract terms: what some have called the “no-reading problem.” The failure of consumers to review and understand contract provisions before manifesting assent may incentivize companies to offer one-sided contracts with terms that are primarily beneficial to businesses.
In their new article, Contracts in the Age of Smart Readers, Professors Yonathan A. Arbel and Samuel Becher make a noteworthy contribution to scholarship in the technology and contract law fields by highlighting how nascent technological advancements in language models associated with artificial intelligence can disrupt the status quo. Their powerful article adds to an existing body of scholarship exploring the important connection between technological developments and what the authors describe as one of the underlying justifications for legal intervention in consumer transactions: the “no reading problem.”
Arbel and Becher tout various possible benefits of novel language models, which they label as “smart readers,” by offering several examples of this technology in action. They observe that armed with a smart reader app, a consumer could in theory use their smartphone to scan and receive a plain and concise explanation of boilerplate provisions in a company’s terms and conditions. Contractual text could be personalized based on the needs of each reader by factoring in cognitive, linguistic, and cultural patterns. A consumer using a smart reader could request concrete examples describing the possible implications of boilerplate clauses.
Arbel and Becher note that smart readers have the capacity to compare the terms of a company’s privacy policy with those offered by other businesses and generate an industry score that the consumer could then use to comparison shop. The authors convincingly argue that, if widely adopted, this technology could potentially enhance consumer understanding of contract terms and privacy policies and the risks associated with the same, as well as increase consumer awareness of market alternatives. They contend that smart readers may facilitate “term competition” (P. 91) in certain markets, even if the technology is not widely adopted.
After persuasively describing the potential advantages of smart readers, Arbel and Becher highlight the possible risks associated with smart readers. These concerns include the possibility of courts over-relying on consumer access to such apps, which may negatively impact outcomes for consumers. Adversarial attacks, which the authors describe as “a method of exploiting the statistical nature of machine learning models” (P. 121) may also make contractual explanations and industry scores less accurate and reliable. Arbel and Becher note that in some cases smart readers could oversimplify boilerplate terms, which could decrease consumer understanding. Lastly, businesses could offer better terms to those consumers who they believe will use smart readers and comparison shop, and less favorable terms to those who do not, thereby exacerbating discrimination concerns.
Arbel and Becher posit that legal interventions in favor of consumers are often “couched in the no-reading problem.” (P. 134.) However, smart readers offer a different way of tackling the no-reading issue. They suggest that the no-reading problem is perhaps a technological issue that smart readers can help to solve, rather than an ethical one deserving of legal intervention. The authors contend that while smart readers do not address various other justifications for pro-consumer legal intervention, such as other forms of market failure, smart readers may soon render the no-reading justification obsolete. Arbel and Becher’s notable and insightful description of smart readers’ growing potential should be of particular interest to technology law, contract law, and consumer law scholars, as well as others who are interested in learning more about the ways in which technological advancements may impact core justifications for consumer protection intervention.
