I heard Omri Ben-Shahar present a really interesting paper he’d done with Oren
Bar-Gill, No Contract, about the rise
of “no contract” cell phone service, etc., where the selling point is that
there’s no early termination fee.This
wasn’t his focus, but I was intrigued by the question of whether the fine print
for these contracts—because there is fine print—could include an enforceable
mandatory arbitration clause.My
inclination is no, at least when the promise is “no contract,” especially
coupled with an image (“no termination fee” would be a different matter).Plainly, there is a rudimentary contract
between the parties: the customer pays the advertised price and gets the
advertised service.But are there any other
terms?The explicit promise seems to be
no, and I don’t see how the fine print can add in a term that would undoubtedly
surprise many consumers (a ban on litigation and an arbitration requirement).
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