Abstract

Fifty years ago, Grant Gilmore published his famous book, The Death of Contract, which argued that modern American contract law was the creation of a handful of judges and academics, rather than a reflection of the real evolution of caselaw. Contract law was, in Gilmore’s words, an “ivory tower abstraction” that lived “in the law schools, not the law courts.” Even as Gilmore wrote, however, contract law was “dying” as it was being displaced by specialized regulatory regimes.

This Article tells a parallel story about consumer contracts. The idea of a distinct body of consumer contract law is an academic concept that emerged with the American Law Institute’s Restatement of Consumer Contracts. Yet there is nothing unique about consumer contract law; the law of consumer contracts is the same as for contracts generally. There is, in fact, only scant caselaw even involving consumer contracts because of the economics of consumer contract litigation: there is seldom enough money at stake for consumers to litigate individual contract disputes. Instead, consumer contract litigation has become a one-way affair of businesses getting default judgments against consumers on contracts.

Litigation economics renders contract doctrine irrelevant for most consumer contract disputes other than enforcement of arbitration clauses, where contract doctrine has become a tool for a regressive wealth transfer from consumers to businesses, rather than a means of facilitating Pareto-improving transactions. The failure of contract doctrine has resulted in public regulation replacing private contract as the primary means of ordering business-to-consumer relations. Consumer contract law is dead. We now live in the age of consumer law. 

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