Is a contract valid if one of the party doesn't even read it?

Question

You might think someone must be stupid to sign a contract without even reading it. Yet I see it happen all the time, when contracts are just too long and there's no time to read stuff you suppose you already know. Typical examples are contracts you "accept" online, like TOS's and privacy policies. Nobody reads that. And the funny thing is that the other party usually knows you haven't read it. Websites know that nobody reads their huge TOS's or privacy policies, and it has also been demonstrated (researches, polls, articles). And the salesman telling you "just sign here, it's the usual stuff", they know you haven't read it because they saw you sign it without reading it.

In the case of online contracts, you don't even have a copy of them, so the other party could change the terms and you wouldn't even have a way to know it. Stackexchange could tell me that I agreed to post at least a question per month, or my profile would be deleted. Well, did I agree to that? Maybe, who knows, I don't know what was really written in the TOS when I clicked, and now they might have changed the terms and there could be no trace of the old contract.

So are these contracts valid? What makes a contract valid and binding?

If jurisdiction is important, I'm interested in the EU and the US.

Answer 1

Typical examples are contracts you "accept" online, like TOS's and privacy policies. Nobody reads that... Websites know that nobody reads their huge TOS's or privacy policies, and it has also been demonstrated (researches, polls, articles)...

To target this specific portion of your question, this was addressed in Zappos.com Inc., Customer Data Security Breach Litigation (MDL No. 2357), U.S. District Court, District of Nevada. Consumers won a small victory.

From Zappos.com Loses Arbitration Bid in Data Breach Class Action Lawsuit:

The main problem, according to the court, is that the arbitration clause is buried as a “snippet” in a 4-page Terms of Use contract, which can only be found by clicking on an obscure link on the site.

“We cannot conclude that Plaintiffs ever viewed, let alone manifested assent to, the Terms of Use. The Terms of Use is inconspicuous, buried in the middle to bottom of every Zappos.com webpage among many other links, and the website never directs a user to the Terms of Use. No reasonable user would have reason to click on the Terms of Use, even those users who have alleged that they clicked and relied on statements found in adjacent links, such as the site’s ‘Privacy Policy,’” the court said.

Later, the court blasts Zappos for trying to bind users into arbitration simply because they browse the site. According to the court:

“The arbitration provision found in the Zappos.com Terms of Use purportedly binds all users of the website by virtue of their browsing. However, the advent of the Internet has not changed the basic requirements of a contract, and there is no agreement where there is no acceptance, no meeting of the minds, and no manifestation of assent. A party cannot assent to terms of which it has no knowledge or constructive notice, and a highly inconspicuous hyperlink buried among a sea of links does not provide such notice. Because Plaintiffs did not assent to the terms, no contract exists, and they cannot be compelled to arbitrate.”

So it seems the court recognizes there is no meeting of the minds in some instances.

Answer 2

This applies to contract law in US and many (if not all) of EU jurisdictions.

Is a contract valid if one of the party doesn't even read it?

Yes. A meeting of the minds is presumed as long as the contract has been signed.

The party's deliberate choice not to read the clauses does not release him or her from the obligations acquired at the moment the contract was willfully signed. Although contract law typically refers to entering a contract knowingly, a more correct phrasing would be that the party knew or should have known the clauses when deciding to enter the contract.

In the case of online contracts, you don't even have a copy of them, so the other party could change the terms and you wouldn't even have a way to know it.

Technically one can "always" (?) save a copy of the online contract (by clicking on "Save As ...", printing the document, taking a screenshot, etc.). It is just doubtful that people take that precaution, as it seems unprecedented or very unusual for the draftsman to alter the contract retroactively and/or without proper (and timely) notice to the other party.

Assuming that no one else saved a copy of the contract, the situation you outline would require some sort of forensic analysis to ascertain whether the contract was improperly altered. That analysis might be complemented by scrutinizing the parties' conduct and the timing of the events at issue.

Answer 3

I note that all the particular contracts you cite are contract of adhesion. That is, the balance of power between you and the company is so great that you have no power to negotiate.

Usually such contracts are valid and binding. There is, however, an exception, not if you do not read them, but if a clause is unconscionable. That is, the clause is so unfair as to shocking to the conscience.