Contract design for humans

fine-print, small-print, consumer rights act,
Rob Waller

This New Yorker cartoon (by Joe Dator, 28 October 2019, reproduced by permission of The New Yorker Collection/The Cartoon Bank) sums up the small print dilemma. You can imagine the sound of crashing gears as  the romantic proposal hits the disclaimer. It's absurd and it's a cartoon but actually it's what happens every day when you deal with almost any service brand.

I have just uploaded a new Technical report, ‘Contract design for humans: preventing cognitive accidents’. A shorter version is appearing as a book chapter to be published later this year or possibly next.*

People have complained for a long time about the length, complexity and illegibility of consumer contracts - aka the small print, the terms and conditions, or disclosures. It's one of the things that motivated the Simplification Centre to get going in the first place. There's been legislation which seems to have helped a little, but the print is still small. The plain language movement has helped a lot, but again the print is still small.

And even if the print were to be legible, there is still too much of it, and it's not necessarily focused on what people really need to know. The inflexible declaration "I have read and understood" (impossible to know) or even "I have read and accept" (under the threat of not getting my stuff or my phone no longer working) just exacerbates the problem

The truth is that most people don't read the small print because it's deliberately made unreadable, or at best barely readable. Mostly that’s OK because it's not of practical importance. Until it is. Sometimes it is very important, and people trip up. I argue that many contract-related problems can be viewed as cognitive accidents and that we should change our perspective to one of duty of care, and risk management. So when you’re fined because you bought the wrong train ticket, or you parked in the wrong place, or when you discover you’re locked into a loan agreement you didn’t understand, or when the Free* Flights turn out not to be free, the deciding factors shouldn’t be ‘was it in the terms and conditions?’ but ‘did they assess the risk of not drawing it to your attention?’.

*Marcelo Corrales, Helena Haapio and Mark Fenwick (eds), Research Handbook on Contract Design, Edward Elgar Publishing, in press 

Contact us