Why do Chief Justice Roberts, and Judge Posner, knowingly not read fine print?

Question

Many cases underscore "the importance of reading and understanding the terms and conditions of the contract". See Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52, [43].

43. More recently, in words that are apposite to the present case, in Wilton v Farnworth[10] Latham CJ said:

"In the absence of fraud or some other of the special circumstances of the character mentioned, a man cannot escape the consequences of signing a document by saying, and proving, that he did not understand it. Unless he was prepared to take the chance of being bound by the terms of the document, whatever they might be, it was for him to protect himself by abstaining from signing the document until he understood it and was satisfied with it. [emphasis mine] Any weakening of these principles would make chaos of every-day business transactions."

And see 978011 Ontario Ltd. v. Cornell Engineering Company Ltd., 2001 CanLII 8522 (ON CA), [22].

[22] Stevens acknowledged that he knew it was important to read a document before execution, because once signed one would be bound by the document whether it had been read or not.

Thus I was startled to read this about Roberts and Posner! I assume they can read fine print. But why don't they?

You can watch video of Roberts C.J. saying all this.

Chief Justice John G. Roberts Jr. admitted at a college appearance on Tuesday that he doesn’t usually read the fine print that computer users must agree to before accessing some websites.

It has “the smallest type you can imagine and you unfold it like a map,” he said. “It is a problem,” he added, “because the legal system obviously is to blame for that.” Providing too much information defeats the purpose of disclosure, since no one reads it, he said. “What the answer is,” he said, “I don’t know.”

Answering a student question, Roberts admitted he doesn’t usually read the computer jargon that is a condition of accessing websites, and gave another example of fine print: the literature that accompanies medications, the AP story reports.

But no video for Posner J.

Appearing at a recent American Constitution Society conference, Posner recalled his encounter with hundreds of pages of documentation for his home equity loan, Above the Law reports. Posner got a laugh when he said he didn’t read it; he just signed it.

According to Above the Law blogger David Lat, “It’s the kind of behavior one would expect from a person earning $35,000 and a buying a $600,000 home two hours outside of Phoenix, circa 2006—but not from one of America’s leading jurists.”

Or maybe not. Lat recalls his own encounter with boilerplate before speaking on a panel at New York University School of Law. He and the other speakers were presented with the school’s release form. The first to sign was Cravath, Swaine & Moore presiding partner Evan Chesler.

“He whipped out an expensive-looking pen and signed on the dotted line, without even bothering to read the (fairly brief) release,” Above the Law reports. The rest of the panelists followed suit.

Answer 1

Because it's not worth it in most cases.

If you're signing a contract related to transactions involving thousands of dollars, it makes sense to ensure that all the terms are as you expect. For instance, when you buy a house and take out a mortgage, you'll usually hire a lawyer to go over the fine print, to make sure there are no "gotcha" clauses. And the lawyer is likely to delegate the actual work to a clerk; when your time is worth hundreds of dollars an hour, you don't waste it doing grunt work like this.

But if you're signing up for a web site subscription, you just want to get on with it. Even if you're a legal expert, reading pages and pages of legalese is a chore. Most of it will just be boilerplate, CYA clauses. You want to watch a Netflix video, not pass the bar exam.

And even if you do read the fine print, it can be difficult to discern how they can come back to bite you. Can signing up for a service waive all future rights to sue a company or its subsidiaries describes a case where someone signed up for Disney+, and the TOS apparently includes a binding arbitration clause that prevents suing Disney. Later they died due to a food allergy at a supposedly allergy-safe restaurant at a Disney resort. It's unlikely that even a legal scholar would have realized that signing up for a streaming service would preclude filing a wrongful death lawsuit at a park. And the case hasn't been adjudicated, so we don't know if the clause will actually be upheld (and there's a good chance it will be settled rather than go to court, so we'll never know for sure).

Answer 2

european-union

If you're a consumer, unfair clauses in "fine print" are not binding.

Unless those terms have been "individually negotiated" (which is usually not the case for fine print on a pre-formulated standard contract), EU directive 93/13/EEC requires EU member states to lay down that "unfair terms" that "[cause] a significant imbalance in the parties' rights and obligations arising under the contract, to the detriment of the consumer" shall "not be binding on the consumer".

Answer 3

Margaret Jane Radin proposes seven main reasons why people do not "read the fine print" in her book, Boilerplate: The Fine Print, Vanishing Rights, and the Rule of Law:

Given that frms regularly use boilerplate to transport us into an alternative legal universe, why don’t we read these things? Here are seven answers:

1. We wouldn’t understand the terms if we did read them, so it isn’t worth our time.
2. We need the product or service and have no access to a supplier that does not impose onerous clauses, so reading the terms wouldn’t make any difference.
3. We are not even aware that we are becoming subject to these terms, so we don’t know that there is anything to read.
4. We trust the company not to have included anything harmful.
5. We suppose that anything harmful would be unenforceable.
6. We think that the company has power over us, so that we are simply stuck with what it imposes on us.
7. Yet another reason, and an important one: we don’t believe that we will ever need to exercise our background legal rights. We don’t expect misfortune to befall us. As psychological research has shown, we are not able to make accurate assessments of risks.

All of these issues will be explored in the course of this book.

These are in fact main themes that are returned to throughout the book.

Answer 4

It is non-negotiable, so why bother.

Particularly in the case of intangible good, the fine print is often essentially a definition of the good that you are purchasing. But if you are familiar with that good and the kind of fine print issues that customarily come up. and you experience if that it is worth having that good, warts and all on the seller's terms, it is a waste of time to read it.

Answer 5

Major personal/consumer contracts are standardized.

When a consumer buys or rents a house, gets a mortgage, and buys insurance, in all normal situations, they will be asked to sign a standard contract. In each state, a body, such as the real estate association, bar association or insurance regulator, will promulgate these contract. Variations will be pre-set, e.g. checking a box for a condition, entering a price, or including another standardized rider.

These contracts have been reviewed by many attorneys and have been extensively litigated. This means there's a high level of certainty on both sides what the parties are agreeing to. This is also important when there's an open market, e.g. when mortgages are sold and reinsurance contracts are taken out.

It is generally impossible and ill-advised to find anybody who works under a different contract. If you want to get a residential mortgage in a certain state, too bad, that's what you get.

This is different from major business contracts, which are complex enough they cannot be accommodated in a simple check-the-box document. Here, careful study by specialized attorneys is called for.

Answer 6

Further to the fine answer given by @Jen, describing the work by Margaret Jane Radin, I'd also add some additional points/rationales (which may well be covered in the book):

8. We don't believe the boilerplate will impose on us any unexpected requirement to act.
9. We don't believe the boilerplate will grant us any unexpected rights that would change the way we'd act.
10. It's too much effort, for the potential benefits.
11. We lack the time.

We could then invert those items to propose that the only reason to EVER READ boilerplate is:

we evaluate the cost of reading it to have lower value than our risk of otherwise missing enforceable clauses that'd either cause us to change our behavior on entering the agreement, or simply walk away from it.

Cost (time and effort) starts at effectively zero and rises rapidly with contract length: we'll essentially always read a one-liner, and never a book.

Risk starts at somewhere around the contract value, and rises slowly with contract length (longer contracts being perhaps slightly more likely to have gotchas).

Since cost rises faster than risk, eventually they cross over. Past that point, it's not worth reading. At that point, better to either sign, or to walk out saying "too much boilerplate is too sus in this context."

Answer 7

I think Roberts' commentary is aimed at over-reach of arbitration clauses, such as the infamous "wrongful death vs Disney+ arbitration" case now making the news, or DirecTV invoking an arb clause the customer had signed with AT&T.

What's the worst thing that could happen?

Each of us does a risk assessment when signing any contract. What is the worst downside risk we could experience? E.G. with Netflix or Hulu, that would be "being left hanging" on a cliffhanger on a TV series. Further, you are unlikely to create any fertile ground for the website/app to sue you.

On most of these services, your reasonable potential downside risk is less the filing fee in most courts. Therefore, reading every detail of the terms of service is simply not worth it to the average and reasonable consumer.

Roberts is signaling that he sees this as a reasonable person's view.

But, over-reaching TOS applicability breaks the above

This is a warning signal from Roberts on cases like extremely far-reaching arbitration clauses, like the Disney+ and DirecTV cases. Because these "break" the above reasonable man's view of "containment of risk" for these Terms of Service contracts.

Roberts is signaling to litigants that the court (or at least the Chief Justice) would be inclined to firewall such arb clauses to the context in which they are signed. And that these large corporations bring such a suit to the Supreme Court at their peril.

Answer 8

Roberts is the most powerful judge in the country. If any contract he signs doesn't resolve in his favor, he has two options not available to most people:

1. Soft power. "Don't you know who I am?" He or his staff go up the chain of command, asking for the problem to go away. Maybe e.g. a shady car dealership or software company decide it's not worth picking a fight with one of the most well-known lawyers in the country. Why would they give up? PR (nobody wants a Washington Post story about how bad their car dealership is), and for larger companies, not wanting to prejudice Roberts for future cases. (If, say, Epic Systems gave him a shady contract, they might not want to get on his bad side.)
2. Hard power. Roberts is one of 9 judges who are the ultimate arbiters of contract law in the united states. The justices are all friends. It's not a stretch to imagine they would band together on an issue affecting one of them, and rule in favor of the justice and against the other contract party. The judges could expand their Trump v. US ruling to include Supreme Court justices, and find that Roberts had absolute immunity for any contract signed as sitting justice. There goes your ability to sue a sitting justice for breach of contract.