Consumer protection against unfair terms in consumer contracts has witnessed a reluctant consideration from both the legislature and the administrative authorities in Cameroon. Nonetheless, with the numerous hardship and cries, it became imperative before 1990, for the legislature to pass Law No. 1990/031 of August 10, 1990, relating to commercial activity in Cameroon. This does not refute the fact that there have been other pieces of legislation, such as the Cameroon Penal Code and the Old French Civil Code applicable in Cameroon, to protect consumers vulnerable, in front of unscrupulous sellers of goods and service providers. The objective of this study is therefore to examine the basis of consumer protection against unfair terms in consumer contracts in Cameroon from an international, regional and national dimension. To obtain the available information, the study employs two methods of data treatment. That is a primary or empirical and secondary method of data collection and treatment. Based on the analyses of this study, it is, therefore, established that there is a need for inclusive governmental, parliamentary, and judicial intervention in the guaranteeing of consumer interests and safety, tougher institutional arrangement and increase consumer awareness to establish a more resourceful system for consumer protection in Cameroon.
{"title":"The Basis of Consumer Protection Against Unfair Terms in Consumer Contract in Cameroon","authors":"Tambe Hans Tambe","doi":"10.2139/ssrn.3821549","DOIUrl":"https://doi.org/10.2139/ssrn.3821549","url":null,"abstract":"Consumer protection against unfair terms in consumer contracts has witnessed a reluctant consideration from both the legislature and the administrative authorities in Cameroon. Nonetheless, with the numerous hardship and cries, it became imperative before 1990, for the legislature to pass Law No. 1990/031 of August 10, 1990, relating to commercial activity in Cameroon. This does not refute the fact that there have been other pieces of legislation, such as the Cameroon Penal Code and the Old French Civil Code applicable in Cameroon, to protect consumers vulnerable, in front of unscrupulous sellers of goods and service providers. The objective of this study is therefore to examine the basis of consumer protection against unfair terms in consumer contracts in Cameroon from an international, regional and national dimension. To obtain the available information, the study employs two methods of data treatment. That is a primary or empirical and secondary method of data collection and treatment. Based on the analyses of this study, it is, therefore, established that there is a need for inclusive governmental, parliamentary, and judicial intervention in the guaranteeing of consumer interests and safety, tougher institutional arrangement and increase consumer awareness to establish a more resourceful system for consumer protection in Cameroon.","PeriodicalId":333064,"journal":{"name":"LSN: Other Issues Involving the Sale of Goods or Services to Consumers (Topic)","volume":"27 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-04-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132475621","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-07-01DOI: 10.1017/9781108399456.014
Martin Senftleben
In the European Union (EU), the criteria for determining a sign’s eligibility for trademark protection are harmonized to a large extent. On the one hand, the trademark legislation and office practices in EU Member States have to keep within the harmonized legal framework set forth in the EU Trade Mark Directive (TMD). On the other hand, the European Union Trade Mark Regulation (EUTMR) provides for a set of eligibility criteria that apply to European Union Trade Marks (EUTM) with equal effect throughout the EU territory. As the rules in the Regulation are in line with those in the Directive, the two legislative instruments constitute a robust body of harmonized norms informing the decision on the registration of a sign as a trademark. The harmonizing effect is enhanced by the fact that national courts have to refer questions relating to the application and interpretation of eligibility criteria to the Court of Justice of the European Union (CJEU).
As in other regions of the world, the criteria applied to determine eligibility for trademark protection are quite flexible in the EU. The open-ended definition of protectable subject matter leaves room for the extension of trademark protection to non-traditional types of marks, such as shape, sound and colour marks. Trademark offices applying EU trademark law have also accepted, for instance, abstract colours and colour combinations, motion and multimedia marks, melodies and sounds, taste marks, hologram marks and position marks.
The analysis of the trend to register non-traditional marks in the EU outlines the legal framework which the CJEU developed to assess the eligibility of non-traditional types of source identifiers for trademark protection. On this basis, it discusses the objective to safeguard freedom of competition and the legal instruments which the CJEU employs for this purpose: the requirement of providing evidence of the acquisition of distinctive character through use in trade and the categorical exclusion of functional signs from trademark protection. Drawing conclusions, it will become apparent that the basic requirement of distinctive character plays an ambiguous role in the regulation of access to trademark protection for non-traditional marks. It is both an obstacle to trademark protection and an incentive for enhanced investment in non-traditional types of marks.
{"title":"Signs Eligible for Trademark Protection in the European Union – Dysfunctional Incentives and a Functionality Dilemma","authors":"Martin Senftleben","doi":"10.1017/9781108399456.014","DOIUrl":"https://doi.org/10.1017/9781108399456.014","url":null,"abstract":"In the European Union (EU), the criteria for determining a sign’s eligibility for trademark protection are harmonized to a large extent. On the one hand, the trademark legislation and office practices in EU Member States have to keep within the harmonized legal framework set forth in the EU Trade Mark Directive (TMD). On the other hand, the European Union Trade Mark Regulation (EUTMR) provides for a set of eligibility criteria that apply to European Union Trade Marks (EUTM) with equal effect throughout the EU territory. As the rules in the Regulation are in line with those in the Directive, the two legislative instruments constitute a robust body of harmonized norms informing the decision on the registration of a sign as a trademark. The harmonizing effect is enhanced by the fact that national courts have to refer questions relating to the application and interpretation of eligibility criteria to the Court of Justice of the European Union (CJEU). <br><br>As in other regions of the world, the criteria applied to determine eligibility for trademark protection are quite flexible in the EU. The open-ended definition of protectable subject matter leaves room for the extension of trademark protection to non-traditional types of marks, such as shape, sound and colour marks. Trademark offices applying EU trademark law have also accepted, for instance, abstract colours and colour combinations, motion and multimedia marks, melodies and sounds, taste marks, hologram marks and position marks. <br><br>The analysis of the trend to register non-traditional marks in the EU outlines the legal framework which the CJEU developed to assess the eligibility of non-traditional types of source identifiers for trademark protection. On this basis, it discusses the objective to safeguard freedom of competition and the legal instruments which the CJEU employs for this purpose: the requirement of providing evidence of the acquisition of distinctive character through use in trade and the categorical exclusion of functional signs from trademark protection. Drawing conclusions, it will become apparent that the basic requirement of distinctive character plays an ambiguous role in the regulation of access to trademark protection for non-traditional marks. It is both an obstacle to trademark protection and an incentive for enhanced investment in non-traditional types of marks.<br>","PeriodicalId":333064,"journal":{"name":"LSN: Other Issues Involving the Sale of Goods or Services to Consumers (Topic)","volume":"45 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-07-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115883155","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
If the complainant sells the good/commodity/product which forms the subject matter of the complaint or appeal arising from the complaint during the pendency of the complaint or appeal, then the complainant ceases to be ‘consumer’ within the meaning of Section 2 (1) (d) of the CPA.
An appeal preferred against a decree is seen as continuation of suit, and till the time the suit continues, the rights and liabilities of the parties to the proceedings do not get crystallized. Although ‘complaint’ preferred under the CPA is not a ‘suit’ in the literal sense but the same logic applies to it as that which is applicable to a ‘suit’ preferred under the Civil Procedure Code, 1908, that is to say, if against the judgment passed by the Hon’ble Forum in a complaint preferred before it, an appeal is preferred by the opposite party then the rights and liabilities of the parties to the lis remain res sub judice and do not become res judicata. Thus, even if during the pendency of an appeal the subject matter of the consumer complaint, that is, the good/commodity/product is sold off by the complainant then the complainant ceases to be ‘consumer’ within the definitional scope of Section 2 (1) (d) of the CPA.
{"title":"Once Vehicle Is Sold During Pendency of the Complaint, Complainant Ceases to Be ‘Consumer’: The Consumer Protection Act, 1986","authors":"Shivam Goel","doi":"10.2139/ssrn.3309130","DOIUrl":"https://doi.org/10.2139/ssrn.3309130","url":null,"abstract":"If the complainant sells the good/commodity/product which forms the subject matter of the complaint or appeal arising from the complaint during the pendency of the complaint or appeal, then the complainant ceases to be ‘consumer’ within the meaning of Section 2 (1) (d) of the CPA.<br><br>An appeal preferred against a decree is seen as continuation of suit, and till the time the suit continues, the rights and liabilities of the parties to the proceedings do not get crystallized. Although ‘complaint’ preferred under the CPA is not a ‘suit’ in the literal sense but the same logic applies to it as that which is applicable to a ‘suit’ preferred under the Civil Procedure Code, 1908, that is to say, if against the judgment passed by the Hon’ble Forum in a complaint preferred before it, an appeal is preferred by the opposite party then the rights and liabilities of the parties to the lis remain res sub judice and do not become res judicata. Thus, even if during the pendency of an appeal the subject matter of the consumer complaint, that is, the good/commodity/product is sold off by the complainant then the complainant ceases to be ‘consumer’ within the definitional scope of Section 2 (1) (d) of the CPA.","PeriodicalId":333064,"journal":{"name":"LSN: Other Issues Involving the Sale of Goods or Services to Consumers (Topic)","volume":"32 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-01-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"133931742","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Online shopping has quickly replaced the brick-and-mortar experience for a large portion of the consuming public. The online transaction itself is rote: browse items, add them to your cart, and checkout. Somewhere along the way, the consumer is likely made aware of (or at least exposed to) the merchant’s terms and conditions, via either a link or a pop-up box. Such terms and conditions have become so ubiquitous that most consumers would be hard-pressed to find a merchant that doesn’t try to impose them somewhere on their website. Though such terms and conditions are pervasive, most consumers do not bother to read them before checking-out. Consumers might be surprised at what they would find if they did read the terms and conditions as many retailers include clauses limiting liability, disclaiming warranties as well as choice of law, forum selection, arbitration, jury waiver, and class action waiver clauses. Many of these clauses are grounded in a practical concern over limiting liability and lowering transaction costs. However, the fact that retailers do not include such clauses as part of their in-store transactions raises the question of whether the retailers are actually concerned with binding consumers to such terms. The apparent lack of importance of these terms is further highlighted by the fact that most retailers use “browsewrap” terms and conditions to bind their customers, despite browsewrap being one of the least effective methods of making consumers aware of the terms. While these terms and conditions may provide some utility to the companies attempting to impose them, the main benefit may in fact be their in terrorem effect. This is especially true in instances where companies have failed to adequately notify their consumers about the terms’ existence. This article examines the various methods that are used in online contracting to bind consumers, as well as the enforceability of the most common terms. The article concludes that the primary incentive sellers have to include such terms on their websites is their in terrorem effect. Though the use of online terms and conditions as in terrorem devices may be appealing economically, the use of browsewrap as the primary notification device ex ante presents moral and ethical issues.
{"title":"Online Terms as In Terrorem Devices","authors":"C. P. Marks","doi":"10.2139/SSRN.3138763","DOIUrl":"https://doi.org/10.2139/SSRN.3138763","url":null,"abstract":"Online shopping has quickly replaced the brick-and-mortar experience for a large portion of the consuming public. The online transaction itself is rote: browse items, add them to your cart, and checkout. Somewhere along the way, the consumer is likely made aware of (or at least exposed to) the merchant’s terms and conditions, via either a link or a pop-up box. Such terms and conditions have become so ubiquitous that most consumers would be hard-pressed to find a merchant that doesn’t try to impose them somewhere on their website. Though such terms and conditions are pervasive, most consumers do not bother to read them before checking-out. Consumers might be surprised at what they would find if they did read the terms and conditions as many retailers include clauses limiting liability, disclaiming warranties as well as choice of law, forum selection, arbitration, jury waiver, and class action waiver clauses. Many of these clauses are grounded in a practical concern over limiting liability and lowering transaction costs. However, the fact that retailers do not include such clauses as part of their in-store transactions raises the question of whether the retailers are actually concerned with binding consumers to such terms. The apparent lack of importance of these terms is further highlighted by the fact that most retailers use “browsewrap” terms and conditions to bind their customers, despite browsewrap being one of the least effective methods of making consumers aware of the terms. While these terms and conditions may provide some utility to the companies attempting to impose them, the main benefit may in fact be their in terrorem effect. This is especially true in instances where companies have failed to adequately notify their consumers about the terms’ existence. This article examines the various methods that are used in online contracting to bind consumers, as well as the enforceability of the most common terms. The article concludes that the primary incentive sellers have to include such terms on their websites is their in terrorem effect. Though the use of online terms and conditions as in terrorem devices may be appealing economically, the use of browsewrap as the primary notification device ex ante presents moral and ethical issues.","PeriodicalId":333064,"journal":{"name":"LSN: Other Issues Involving the Sale of Goods or Services to Consumers (Topic)","volume":"41 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-03-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"121281526","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
In a US Senate Hearing in 2011, Eric Schmidt, Google’s CEO, stated that ‘competition is only one click away’. On the 27th of June 2017, the European Commission fined Google €2.42 billion for allegedly ‘abusing dominance as search engine by giving illegal advantage to own comparison shopping service’. Ruthlessly, fine is only one click away too. What does the European Commission criticise for imposing such a break-record fine to Google? According to Competition Commission Margareth Vestager, ‘Google abused its market dominance as a search engine by promoting its own comparison shopping service in its search results, and demoting those of competitors’ (...) therefore denying ‘other companies the chance to compete on the merits and to innovate. And most importantly, it denied European consumers a genuine choice of services and the full benefits of innovation’. The products referenced on Google Shopping, the shopping platform of Google Inc., have been promoted in the search results in comparison with other shopping platforms, the Commission considered. The legal arguments of the European Commission are clear: thanks to its complex algorithms, Google has allegedly manipulated the search results of products in order to promote its own platform, Google Shopping, at the expense of competitors. Because the position on the search results is tantamount to a price paid by competitors in order to attract consumers, by manipulating its search results, Google has abused its dominance and therefore infringed Article 102 TFEU because it i) ‘has systematically given prominent placement to its own comparison shopping service’ and ii) ‘has demoted rival comparison shopping services in its search results’. Albeit clear, both legal arguments of the European Commission are nonetheless unsubstantiated and ungrounded as discussed below successively.
{"title":"Fine is Only One Click Away","authors":"Aurélien Portuese","doi":"10.2139/ssrn.3003953","DOIUrl":"https://doi.org/10.2139/ssrn.3003953","url":null,"abstract":"In a US Senate Hearing in 2011, Eric Schmidt, Google’s CEO, stated that ‘competition is only one click away’. On the 27th of June 2017, the European Commission fined Google €2.42 billion for allegedly ‘abusing dominance as search engine by giving illegal advantage to own comparison shopping service’. Ruthlessly, fine is only one click away too. \u0000What does the European Commission criticise for imposing such a break-record fine to Google? According to Competition Commission Margareth Vestager, ‘Google abused its market dominance as a search engine by promoting its own comparison shopping service in its search results, and demoting those of competitors’ (...) therefore denying ‘other companies the chance to compete on the merits and to innovate. And most importantly, it denied European consumers a genuine choice of services and the full benefits of innovation’. \u0000The products referenced on Google Shopping, the shopping platform of Google Inc., have been promoted in the search results in comparison with other shopping platforms, the Commission considered. \u0000The legal arguments of the European Commission are clear: thanks to its complex algorithms, Google has allegedly manipulated the search results of products in order to promote its own platform, Google Shopping, at the expense of competitors. Because the position on the search results is tantamount to a price paid by competitors in order to attract consumers, by manipulating its search results, Google has abused its dominance and therefore infringed Article 102 TFEU because it i) ‘has systematically given prominent placement to its own comparison shopping service’ and ii) ‘has demoted rival comparison shopping services in its search results’. \u0000Albeit clear, both legal arguments of the European Commission are nonetheless unsubstantiated and ungrounded as discussed below successively.","PeriodicalId":333064,"journal":{"name":"LSN: Other Issues Involving the Sale of Goods or Services to Consumers (Topic)","volume":"53 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-07-17","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"117287485","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Contractual agreements with consumers for the supply of goods or services in everyday life sometimes contain terms that are more favourable to traders but unfair to consumers. These terms, when implemented, may be extremely harsh to consumers because their rights might be limited. Hire purchase agreement is not left out of this predicament. This paper seeks to analyse the concept of hire purchase, its origin and evolution in Nigeria as well as examine unfair terms embedded in a hire purchase agreement with the view of highlighting matters arising there from and proffering solutions to it.
{"title":"Unfair Terms in Hire Purchase Agreement: Matters Arising","authors":"Dorcas A Odunaike","doi":"10.2139/SSRN.2866046","DOIUrl":"https://doi.org/10.2139/SSRN.2866046","url":null,"abstract":"Contractual agreements with consumers for the supply of goods or services in everyday life sometimes contain terms that are more favourable to traders but unfair to consumers. These terms, when implemented, may be extremely harsh to consumers because their rights might be limited. Hire purchase agreement is not left out of this predicament. This paper seeks to analyse the concept of hire purchase, its origin and evolution in Nigeria as well as examine unfair terms embedded in a hire purchase agreement with the view of highlighting matters arising there from and proffering solutions to it.","PeriodicalId":333064,"journal":{"name":"LSN: Other Issues Involving the Sale of Goods or Services to Consumers (Topic)","volume":"21 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2016-11-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"117141343","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
FanDuel and DraftKings have become the two biggest contenders in the fast-growing daily fantasy sports industry. Heavy hitters in the sports world, like Fox Sports and NBC, have also jumped onto the daily fantasy sports bandwagon. But in New York, these websites have been made illegal. Other states are considering classifying daily fantasy sports as illegal gambling. The question of what now to do with daily fantasy sports has just been opened up, but the answer is not simple. It is undesirable to suddenly declare a multibillion-dollar industry illegal without qualification, but there are currently no regulations limiting fantasy sports providers. Analogous regulatory systems found in securities exchange regulations may be the key. Securities trading and “traditional” sports gambling have long been analogized and compared, and it is possible to fit fantasy football into this comparison between sports betting and securities exchanges. This note argues that a broader look at the structure of the provider itself – how the provider receives and disseminates information, how the provider deals between participants, what connections the provider has to the relevant industry – may provide a more useful framework to configure a solution to the biggest problems currently effecting fantasy sports.
{"title":"Turning Fantasy into Regulatory Reality: A Comparative Approach to Daily Fantasy Sports Through Contracts","authors":"P. Feeney","doi":"10.2139/ssrn.2757152","DOIUrl":"https://doi.org/10.2139/ssrn.2757152","url":null,"abstract":"FanDuel and DraftKings have become the two biggest contenders in the fast-growing daily fantasy sports industry. Heavy hitters in the sports world, like Fox Sports and NBC, have also jumped onto the daily fantasy sports bandwagon. But in New York, these websites have been made illegal. Other states are considering classifying daily fantasy sports as illegal gambling. The question of what now to do with daily fantasy sports has just been opened up, but the answer is not simple. It is undesirable to suddenly declare a multibillion-dollar industry illegal without qualification, but there are currently no regulations limiting fantasy sports providers. Analogous regulatory systems found in securities exchange regulations may be the key. Securities trading and “traditional” sports gambling have long been analogized and compared, and it is possible to fit fantasy football into this comparison between sports betting and securities exchanges. This note argues that a broader look at the structure of the provider itself – how the provider receives and disseminates information, how the provider deals between participants, what connections the provider has to the relevant industry – may provide a more useful framework to configure a solution to the biggest problems currently effecting fantasy sports.","PeriodicalId":333064,"journal":{"name":"LSN: Other Issues Involving the Sale of Goods or Services to Consumers (Topic)","volume":"23 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2016-03-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"133076294","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
A condition is a term that is so essential to the agreement that its breach is considered to be a substantial failure to perform the contract. A breach of a condition is said to go to the root of the contract. A warranty is a term of contract that is not so essential. A warranty must be performed, but a breach of it is not considered to go to the root of the contract. This meaning of warranty should not be confused with other uses of the word such as in “one-year maintenance warranty”. Damages are the remedy for breach of a warranty.
{"title":"Contracts of Sale: Terms, Conditions and Warranties with Special Reference to Sale of Goods Act, 1930","authors":"Sankalp Jain","doi":"10.2139/SSRN.2776977","DOIUrl":"https://doi.org/10.2139/SSRN.2776977","url":null,"abstract":"A condition is a term that is so essential to the agreement that its breach is considered to be a substantial failure to perform the contract. A breach of a condition is said to go to the root of the contract. A warranty is a term of contract that is not so essential. A warranty must be performed, but a breach of it is not considered to go to the root of the contract. This meaning of warranty should not be confused with other uses of the word such as in “one-year maintenance warranty”. Damages are the remedy for breach of a warranty.","PeriodicalId":333064,"journal":{"name":"LSN: Other Issues Involving the Sale of Goods or Services to Consumers (Topic)","volume":"75 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2015-10-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"124864165","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Exit from contract is one of the most powerful consumer protection devices, freeing consumers from bad deals and keeping businesses honest. Yet consumers often choose transactions with lock-in provisions, trading off exit rights for other perks. This article examines the costs and benefits of free exit, as compared to the lock-in alternative. It argues that present regulation of exit penalties is poorly tailored to address concerns about lock-in, particularly in light of increasingly ubiquitous market-based solutions. The article also calls (regulatory) attention to loyalty rewards, which are shown to be as powerful as exit penalties, and equally detrimental.
{"title":"Exit From Contract","authors":"O. Bar‐Gill, O. Ben‐Shahar","doi":"10.2139/ssrn.2220271","DOIUrl":"https://doi.org/10.2139/ssrn.2220271","url":null,"abstract":"Exit from contract is one of the most powerful consumer protection devices, freeing consumers from bad deals and keeping businesses honest. Yet consumers often choose transactions with lock-in provisions, trading off exit rights for other perks. This article examines the costs and benefits of free exit, as compared to the lock-in alternative. It argues that present regulation of exit penalties is poorly tailored to address concerns about lock-in, particularly in light of increasingly ubiquitous market-based solutions. The article also calls (regulatory) attention to loyalty rewards, which are shown to be as powerful as exit penalties, and equally detrimental.","PeriodicalId":333064,"journal":{"name":"LSN: Other Issues Involving the Sale of Goods or Services to Consumers (Topic)","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2014-07-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"129599827","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Over the past forty years, an irrelevance proposition has been prevalent in law-and-economics scholarship: bargaining power should affect only price and not nonprice terms of a contract. In contrast, practitioners and commentators in industry regularly invoke bargaining power to explain static and dynamic variance in nonprice contract terms. This Article unpacks and analyzes the assumptions of the strong- and weak-versions of this bargaining power irrelevance proposition to bridge the gap between theory and the real world. In the first half of the Article, we identify and discuss a variety of explanations for the effect of bargaining power on contract design. These include the effects of shifts in market supply and demand and the effect of negotiating price first and nonprice terms later. In the second half of the Article, we present an in-depth examination of one set of explanations, concerning the impact of bargianing power and information asymmetry on nonprice terms, when the value and cost of nonprice terms vary across contracting parties. In the extreme cases in which one or the other party enjoys overwhelming bargaining power, the efforts of that party to capture a larger share of the surplus by screening or signaling may compromise the efficiency of the nonprice terms. We show that this incentive disappears or is mitigated when bargaining power is more evenly shared between the parties: for example, when a monopolist faces the threat of competition, when the parties can renegotiate, or when they engage in bilateral bargaining with more even bargaining power. As a whole, the Article provides a theoretical basis for interpreting the intuition among market participants that the impact of bargaining power extends beyond price terms. Before concluding, we briefly suggest implications for legal policy, particularly the contract law doctrine of unconscionability.
{"title":"The Effect of Bargaining Power on Contract Design","authors":"A. Choi, George G. Triantis","doi":"10.2139/ssrn.2010083","DOIUrl":"https://doi.org/10.2139/ssrn.2010083","url":null,"abstract":"Over the past forty years, an irrelevance proposition has been prevalent in law-and-economics scholarship: bargaining power should affect only price and not nonprice terms of a contract. In contrast, practitioners and commentators in industry regularly invoke bargaining power to explain static and dynamic variance in nonprice contract terms. This Article unpacks and analyzes the assumptions of the strong- and weak-versions of this bargaining power irrelevance proposition to bridge the gap between theory and the real world. In the first half of the Article, we identify and discuss a variety of explanations for the effect of bargaining power on contract design. These include the effects of shifts in market supply and demand and the effect of negotiating price first and nonprice terms later. In the second half of the Article, we present an in-depth examination of one set of explanations, concerning the impact of bargianing power and information asymmetry on nonprice terms, when the value and cost of nonprice terms vary across contracting parties. In the extreme cases in which one or the other party enjoys overwhelming bargaining power, the efforts of that party to capture a larger share of the surplus by screening or signaling may compromise the efficiency of the nonprice terms. We show that this incentive disappears or is mitigated when bargaining power is more evenly shared between the parties: for example, when a monopolist faces the threat of competition, when the parties can renegotiate, or when they engage in bilateral bargaining with more even bargaining power. As a whole, the Article provides a theoretical basis for interpreting the intuition among market participants that the impact of bargaining power extends beyond price terms. Before concluding, we briefly suggest implications for legal policy, particularly the contract law doctrine of unconscionability.","PeriodicalId":333064,"journal":{"name":"LSN: Other Issues Involving the Sale of Goods or Services to Consumers (Topic)","volume":"32 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2013-01-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127149933","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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