Ken Adams has a recent blog post with some pictures of contracts with “Read Before Signing” written in by the signature block. The idea is likely that someone trying to enforce the contract later, against a claim by the person who signed saying “I didn’t read it, and I didn’t agree to something in there,” will get more leeway from a judge because they took extra effort to tell the person to read it.
Fuller said that signatures, among other corporate formalities, have three main functions: among these is the cautionary function. It means that when someone gives you a piece of paper to sign, the hairs on the back of your neck should stand up and you should start paying attention. That used to be true, when I was a kid. Now, I see pieces of paper all the time (outside my life as a lawyer) being thrust in front of me, and my kids. Most of them are waivers of either little value (courts don’t enforce waivers of personal injury from normal commercial transactions), unnecessary (New Jersey has a robust charitable shield law, so the waivers are moot), a poor way to run a railroad (insurance pays plaintiffs to go away; thumbing your nose behind a waiver or a corporate veil just demands that someone find a way to get around it), or a lame attempt to shirk responsibility (you can recover for negligence, but you’re not supposed to recover for non-negligent accidents).
The problem with Section 19 (the last image in Ken’s post) is that the blocks of BOLD ALL CAPS just become numbing to readers. Like adding too many warning to the instruction booklet for a power tool, the effect of all this “must be prominent” language is to make contracts harder to read, especially for typical consumers. What’s the point? A judge will be just as unsympathetic to the argument of “I only read the BOLD ALL CAPS parts, Judge.”
Have you tried to read the grey small-font text on a rental car contract? I’ve been a lawyer for over 20 years now, and my eyes glaze over. It’s abusive; it’s not really meant to be read (the same is true of online T&C or EULAs that are dozens of pages long, but presented in a 3×3 window). We have quirky rules about contracts of adhesion because of these contracts; the rules didn’t force companies into these contracts. (And my rationale for not reading? I figure, based on my experience, that the agreement is almost certainly poorly drafted and I will be able to do whatever I need to. I also have rental car insurance through my credit card! (see my note above on waivers).
I think that change on this front – making contracts more usable by all sides – will come when outside counsel find themselves ordered to change by in-house lawyers getting pressured by business folks saying “make it easier for customers to decide” and rejecting the kitchen sink approach to drafting. I do this with ecommerce clients upfront when we craft their registration process to reduce the friction of some sign-up steps until they’re needed. That improves usability for their prospective users and in turn increases conversion to the next stage of the customer journey. Everyone wins.
As I told a client the other day, it’s very easy for lawyers to say “add this and it will reduce your risk.” Lawyers are never wrong on that specific point. But that’s seldom what our clients hire us to do: we could all just say “don’t sell that product at all” and we’d be perfectly correct and perfectly useless. Decisions are always trade-offs: just because you don’t know or can’t express the other side of the equation doesn’t mean it’s a costless act.