Justifying Bad Deals

In the past decade, psychological and behavioral studies have found that individual commitment to contracts persists beyond personal relationships and traditional promises. Even take-it-or-leave it consumer contracts get substantial deference from consumers — even when the terms are unenforceable, even when the assent is procedurally compromised, and even when the drafter is an impersonal commercial actor. Indeed, there is mounting evidence that people import the morality of promise into situations that might otherwise be described as predatory, exploitative, or coercive. The purpose of this Article is to propose a framework for understanding what seems to be widespread acceptance of regulation via unread terms. I refer to this phenomenon as “term deference” — the finding that people defer to the term, even when the assent is perfunctory, and even when the term is unfair.

The framework I propose is a motivated reasoning explanation: when it feels better to believe that contracts are fair and that assent is reliable, people are more likely to hold those beliefs. In order to predict when contractual fairness will be especially psychologically urgent, I draw on an extensive body of psychological literature on the preference for believing in a just world, or for being satisfied with the status quo. When a phenomenon or a system appears implacable and unavoidable, it is psychologically less stressful to believe that the system is good. “System justification” is a well-documented psychological phenomenon that predicts when individuals will be motivated to hold beliefs that support the status quo, even when the status quo redounds to their own disadvantage. The two studies reported here manipulate the pressure to support the status quo — to believe that firms are reasonable and contract law is fair — by varying the term’s enforceability, its consequences, and its history. The findings show the predicted patterns, that increased psychological pressure to support the status quo increases beliefs that the status quo is good and fair. These results also align with the prediction that pressure to justify the status quo is not only a psychological state, but also a trait. That trait, highly associated with political conservatism, is reflected in the results suggesting a stronger motivation to justify the status quo among subjects who report that they are more politically conservative. The results here have implications not only for contract law, but also for how we understand self-interest in legal decision-making, and for the legal understandings of consent and compliance.