Yesterday, I was attending the Senate Judiciary markup that passed S. 3325 out of committee. Typically, these meetings will cover several different bills, and this one was no exception. One that had nothing to do with copyright, but still caught my attention, was S. 2838, the Fairness in Nursing Home Arbitration Act.
This bill apparently invalidates pre-dispute arbitration agreements between nursing homes and their patients. Apparently, it's been a problem that nursing homes have been requiring patients or their caretakers to sign these contracts before they will be admitted to the home. Included in the contract is a provision that requires that any disputes be resolved by arbitration, thus barring patients from suing for disputes about care.
Advocates for the bill argue that such clauses are unfair, since they're buried in a long legalese document that people sign at a time when parsing jurisdictional niceties really isn't at the top of their list of priorities. The Judiciary Committee seemed to agree—with a number of senators noting the serious problems caused by “contracts of adhesion.”
A contract of adhesion is a contract where one of the parties is faced with a “take-it-or-leave-it” sort of situation. Contract law is traditionally based on the idea of a negotiated contract, where two parties together work out the terms. In such a situation, you can be fairly certain that both parties know what they're giving up in exchange for what they're getting.
But in everyday life, such contracts are becoming exceedingly rare. In a short piece a few weeks ago, a New York Times commentator noted just how many contracts we agree to every day. These contracts, drafted by one party that holds all the cards, are all contracts of adhesion. You don't really have a chance to debate the terms, tell the car rental company or the airline or the software vendor, “Hey, this bit about not suing you if you are grossly negligent or reckless—can we just change that to not suing for ordinary negligence?” You'd be shown the door.
Or, more likely, given the proportion of contracts that are presented to us on the computer screen, there's no one to actually talk to. There's just those two buttons and that check box.
Some of these agreements require the user to scroll down to the bottom of them, as a supposed inducement to make you read them. Others will have particular paragraphs in ALL CAPS, since those are supposedly the important parts. But what sane, normally busy person actually reads these? Such little gimmicks do nothing to encourage the reading of an agreement, but they're there to be trotted out in court as evidence of the drafter's best efforts—to make the user look like a deliberate scofflaw for not reading the multipage document before considering, carefully, whether they want to quit the install, put the software back in the box, cart it back to the store, argue with a surly clerk for a refund, and say to themselves, “you know, I never really wanted to have a photo-organizing program anyway.” No, if they really wanted the contracts read, they'd make them brief, and in plain English.
This may at first seem trivial compared to the nursing home situation, where you're often faced with an extremely stressed patient or family who are making a difficult and emotional decision. In such circumstances, who would be concerned with this tiny clause in the contract? They'll be paying more attention to the place itself, not the contract, and even when they do look at the contract, it's hardly some choice-of-law section that's going to be getting their attention.
Furthermore, patients can be faced with a Hobson's choice—agree or take a hike. With time-critical decisions, an inordinate amount of pressure can force a party to agree to unfair terms.
So holding patients to a clause like that—one that could, in a worst-case scenario, strip them of their rights to pursue justice for real harms—could be a real problem. So in those cases, refusing to honor that clause makes sense.
But what about the other cases I've mentioned? Software EULAs, the little contracts printed on the back of parking garage stubs? Those are hardly life-or-death issues. By installing software or parking my car, I'm not engaging in anything that will affect the rest of my life.
Actually, that's part of the problem. When contracts are so ubiquitous, it's impossible to get through a day without skimming or skipping the text of a document that has the potential to change important rights I have as a citizen and consumer. It shouldn't require a legal mind to park your car, fly to Dallas, or install Chrome without inadvertently granting someone the right to break your mirrors, shred your luggage, or claim your copyrights. The fact that these decisions aren't meant to have major consequences is actually a good reason that these contracts should have some limits to their scope. The contract shouldn't be able to take what any outside observer would view as a simple consumer/merchant relationship and redraw it as a complex exchange of fundamental rights, just because there's fine print on a label somewhere. Instead of holding a consumer hostage with the time pressure of a weighty decision, these ubiquitous contracts hold hostage small amounts of time that, in aggregate, would overwhelm our days. So instead we end up buying our time with our rights.
If the Senate—and if Congress in general—is interested in protecting consumers from unfair agreements and contracts of adhesion, they need to look beyond just the big contracts—the ones that we sign once in a lifetime. They also need to look at the dozens we sign every day—that, bit by bit, bind us to more and more conditions on how we go about our lives.