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Ralph Nader Speaks on “Contract Servitude”

April 11, 2014 — “[The law of] contracts is cannibalizing tort law, and tort law has been shredded, and they are very much interrelated,” said consumer advocate Ralph Nader, describing in an impassioned speech how consumers are being subordinated “into a state of contract servitude” by signing away their rights. “Because there are so little resistance, the rampages are increasing.”

Nader appeared at “Making the Fine Print Fair,” an April 4th symposium sponsored by the Georgetown Consumer Law Society and Citizen Works. 

To stop the rampage, Nader called for a number of reforms — from banning abusive provisions to changing the way contracts are taught in law school. Additional solutions were presented by Federal Trade Commission Chairwoman Edith Ramirez, who delivered a morning keynote, as well as by Professor David Vladeck, former director of the FTC’s Bureau of Consumer Protection; Visiting Professor Cathy Mansfield; Meredith Fuchs, general counsel of the Consumer Protection Bureau, Deepak Gupta (L’02), and others. Associate Dean Gregory Klass and Bradley Girard (L’14) opened the conference, and Klass and Professor Adam Levitin were among the moderators. 

St. John’s University Law Professor Jeff Sovern described how on April 1, 2010, a British software company hid an interesting clause in its online fine print. Before placing an order, customers could click on the usual box stating “I accept,” which included an agreement to transfer to the company “now and for evermore, your immortal soul.” Consumerist.com later reported that 88 percent of those who ordered that day (7,500 people) had not bothered to read the details.

Vladeck noted that consumers often have no chance to examine a contract before they are asked to sign it.  “It’s very difficult to fault the consumer for not reading the contract when it isn’t presented to them prior to contract formation,” he said. Vladeck also introduced Ramirez, noting the chairwoman’s “incredible passion” for consumer protection.

“[These issues] are the ones that we at the FTC really live through day in and day out,” Ramirez said. “Deception by fine print remains a common denominator among many of our defendants.”

The Georgetown Journal on Poverty Law and Policy, the Georgetown Law chapter of the ACLU and the Georgetown National Lawyers Guild co-sponsored the event. For a full list of participants, click here. To watch the webcast, click here.

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