Ian Ayres, Yale Law School
Alan Schwartz


Instead of promoting informed consumer assent through quixotic attempts to have consumers read ever-expanding disclosures, this Article argues that consumer protection law should focus on "term optimism "-situations in which consumers expect more favorable terms than they actually receive. We propose a system under which mass-market sellers are required periodically to engage in a process of "term substantiation" through which sellers would learn whether their consumers held accurate beliefs about the terms of their agreement. Terms that meet or exceed the median consumer's expectation would be enforceable even if buried or only available on request. But sellers could enforce unexpected, unfavorable terms only if they are disclosed in a "warning box" that has a government- provided standard border. To prevent overuse of the box, sellers would need (i) to exclude terms from the box that meet or exceed consumer expectations and (ii) to order terms in the box in descending order of consumer importance. Such a system of term substantiation coupled with targeted warnings about unexpected terms jettisons as unworkable the duty to read ideal. It instead economizes on consumers ' scarce attention by increasing the salience of those terms that are most likely to inhibit informed consent. Term substantiation lets the representative consumer determine what sellers disclose and thus democratizes the content of form contracts.