Standard form contracts

Standard Form Contracts and
the Duty to Read
Richard Warner
Carnival Cruise Lines v. Shute
The Shute’s entered into a contract to take a
cruise from Los Angeles to Puerto Vallarta.
In international waters, Mrs. Shute slipped on
a mat and fell.
She sued Carnival Cruise Lines in
Washington State, where the Shutes lived.
The contract had a forum selection clause
that required that suits be filed in Florida.
The Presentation of the Terms
The terms were printed on the back of the
ticket, which were sent to the Shutes after
they paid for the cruise.
“A careful reader will find the forum-selection
clause in the 8th of the 25 numbered
paragraphs.” Justice Stevens, dissenting.
The Majority Decision
“[W]e do not address the question whether
respondents had sufficient notice of the forum
clause before entering the contract for
passage. Respondents essentially have
conceded that they had notice of the forumselection provision.”
The Duty to Read
“It will not do for a man to enter into a contract,
and, when called upon to abide by its conditions,
say that he did not read it when he signed it, or
did not know what it contained.”
Sanger v. Dunn, 3 N. W. 388,, 389 (1879).
The argument is a normative one: If you have
an adequate opportunity to read and understand
the agreement, but choose not to, you assume
the risk that the terms may be one’s to which
you object.
The Modern rule
If a party has an adequate opportunity to
read and understand an agreement, then
that party is treated as if he or she read
the agreement even if in fact the party did
not do so.
Justice Stevens’ dissent raises questions
about what counts as an adequate
opportunity to read and understand. .
“Understand” Broadly Understood
“Amazon disclaims all warranties, express or
implied, including, but not limited to, implied
warranties of merchantability and fitness for a
particular purpose. Amazon does not warrant that
the amazon services, information, content,
materials, products (including software) or other
services included on or otherwise made available to
you through the Amazon services, amazon's servers
or electronic communications sent from Amazon are
free of viruses or other harmful components.
amazon will not be liable for any damages of any
kind arising from the use of any Amazon service, or
from any information, content, materials, . . .”
Standard Form Contracts
The courts generally find adequate
opportunity to read and understand
standard form contracts
and online contracts,
Provided that the presentation constitutes an offer
(Specht v. Netscape).
Privacy Policies Too?
Privacy polices are generally treated as
enforeceable contracts.
Robert Sloan and Richard Warner,
Unauthorized Access: The Crisis in Online
Privacy and Security,