This Article argues that informed consent to contract terms is not a good to be maximized, but an information cost that courts should minimize. As a result, courts ought to minimize the cost sum of information costs and contractual surprise. The Article applies information-cost theory to show that information-forcing rules are often inefficient at both the micro- and macroeconomic levels. Such rules also impose greater costs on third parties than the benefits they create for the contracting parties. When one consumer creates an idiosyncratic deal, the information-savings benefits of standardization are reduced for all other potential consumers. The Article demonstrates that in some cases courts are already abandoning a rigid view of contractual consent when consent is too costly; but that under other doctrines, courts insist on an inefficient level of informed contractual consent.
Castles in the Air: F. Gregory Lastowka's Virtual JusticeJurimetrics
Citation InformationJoshua A.T. Fairfield, Castles in the Air: F. Gregory Lastowka's Virtual Justice, 51 Jurimetrics 89 (2010).