The American Law Institute is a group of 4,000 judges, law profs and lawyers that issues incredibly influential “restatements” of precedents and trends in law, which are then heavily relied upon by judges in future rulings; for seven years they have been working on a restatement of the law of consumer contracts (including terms of service) and now they’re ready to publish.
The ALI’s restatement affirms that terms of service are enforceable, even when they are not read by the people they affect, and even if they are written in impentrable legalese that no one could be expected to comprehend. The ALI says that so long as people are given “reasonable notice” that there are terms of service and are afforded a “reasonable opportunity to review” the terms, they are binding. That includes terms of service that force you to surrender your right to sue or join class actions, and that require you over to take any claims before binding arbitration, a system of corporate kangaroo courts where the “judge” is literally in the employ of the company you’re seeking justice from.
The ALI’s plan is so egregious that a bipartisan coalition of 23 state attorneys general have published an open letter to the ALI demanding that it be changed.
John Bergmayer, Senior Counsel at consumer group Public Knowledge, told Motherboard that while restatements may not be legally binding they are hugely influential. He said that the ALI’s reworded interpretation of consumer legal rights is problematic because it would effectively allow corporations to impose contracts on customers without consumer consent.
“To call boilerplate language that consumers never read (or if they did read, could not understand) a “contract” simply has the effect of locking consumers in to terms that are likely to be stacked against them,” he said in an email. Traditionally, “contracts” are legal documents that are mutually agreed to after negotiation between two parties. Functionally, this isn’t how Terms of Service, which few people read and few people can be expected to read and understand, work in the real world. “For some reason, everything you learn about contracts in the first year of law school gets tossed out the window when it comes to large companies unilaterally setting terms for consumers,” Bergmayer added.