3

In the UK there is a legal precedent that unusual or onerous contract terms must be correspondingly prominent; you can't hide them in the fine print of a standard contract. If you try the other party can claim that they never knew about those terms and hence never agreed to them. This is based on the common law principle that a contract is a "meeting of minds", and in such a case there was no common understanding of what the contract contained.

The USA is a common law jurisdiction with the same basic theory of contracts. Does US contract law have a similar principle for unusual or onerous terms in a contract?

3
  • 2
    While the US is a common law jurisdiction, it also delegates a lot of power to its states (which are more like semi-autonomous regions in certain areas; in some respects, the US resembles the EU rather than say, the UK, France or Spain). It may help to narrow this question down to a single US state. Additionally, many US states have differing rules based on the nature of the contract (i.e. negotiated or one-party drafted), and if the counterparty is a natural person or a business.
    – sharur
    Apr 16 at 18:03
  • Depends. Does the UCC have anything to say? Apr 16 at 18:16
  • @PaulJohnson The UCC does have something to say (as noted in the answer from @user6726) but only in the context of contracts for the sale of goods, it isn't a general exposition of contract law for all types of contracts.
    – ohwilleke
    Apr 16 at 20:01
3

For paper contracts there are even statutory "prominence" requirements, generally applicable to "disclaimers": see this Q&A (using local talent), based on UCC §2-316. In a given jurisdiction there will be various contexts where a disclaimer must be made prominently such as in Washington this one regulating life insurance contracts that there must be a "prominent statement that the contract does not provide cash surrender values if such is the case". "Onerous contract" is taken to be an accounting term about costing too much to comply, and I assume (from recent context) that you don't mean that specialized usage.

This article goes through US law in terms of website agreements, which are one kind of "fine print": the points here apply to paper contracts as well. If the terms are not physically in "the agreement", they they must be incorporated by reference, thus "some reference must be in the contract that the customer actually sees it", see E.J. Rogers, Inc. v. UPS, 338 F. Supp. 2d 935. Various cases address the amount of notice required (Manasher v. NECC: must "indicate a clear intent that the provisions would be considered part of the agreement"). International Star Registry of Illinois v. Omnipoint Marketing clearly established that a signed paper contract can refer to online terms (url provided, a "have read and agree..." statement above the physical signature). For clickwrap contracts, see Hugger-Mugger, L.L.C. v. NetSuite – clicking agree means that you are held to have read and understood the terms, as long as the terms meet the standard for incorporation by reference. The central requirement of notice is that there has to be a clear indication that the external document is incorporated into the contract, and the party must be clearly told where that document is. While a seller / service-provider can change the terms of a contract, those changes do not automatically apply to an existing party to an earlier version – Douglas v. US District Court, 495 F.3d 1062 and references therein – unless the customer is actively notified of a change in terms.

As far as I know, there is no case law establishing a computational specification of what it means to "notify" a customer of incorporated terms. There are plenty of terrible web pages where links go nowhere (can fine print be in invisible ink?). One might assume that a diligent customer would trace all of the relevant documents to see what they agreed to if they are told that they must agree to these non-existent terms. One might also assume that since there is nothing there, agreeing to a null document adds nothing to the contract, and the vendor bears the responsibility for making the terms actually findable, though they bear no responsibility for making sure the customer looked.

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.