One of the open secrets of contract law is the fact that the contracting parties are not interested in reading the fine print—the "boilerplate"—that fills purchase orders, acknowledgments and other documents that are supposed to be the official record of the contract. Buyers and sellers are interested in the product or service they are buying and selling, the price and, perhaps a few other terms such as the delivery term. They are rarely interested in warranties, remedies for breach of contract, or clauses that require any dispute to be sent to arbitration rather than a court of law. With the rise of electronic contracting, the same problem occurs with standardized terms appearing on computer screens. Many buyers are too impatient to wade through the "legalese" before they can access a database or order a product. They would rather skip that boring stuff and simply click "I agree" or some other phrase on the screen that indicates their assent to the terms. Such an action has the same effect as signing a document containing the terms. The law has long embraced the view that if you sign such a document (or, today, click "I agree") without bothering to read the terms, you are bound by what you "sign" since you had an opportunity to review the terms and decide whether to agree.

While the signing or other manifestation of assent to unread boilerplate typifies the consumer transaction, businesses (called "merchants" under the governing law) are also quite likely to indicate agreement to such terms without reviewing them. Again, if you had an opportunity to review them but chose to indicate your agreement without bothering to read, much less understand them, you are bound. While this is the general legal result, there is a concern that you might get stuck with some bizarre or highly oppressive term. If there is anything amounting to such egregious conduct as fraud, misrepresentation, duress, undue influence or some kinds of mistake, courts are willing to grant relief from the unread terms. Courts may also find that the boilerplate term is "unconscionable" if it is the product of some effort to hide it through very fine and faint print on the back of the document and if the term, itself, is oppressive—the kind of term that would have caused you not to sign if you had known about it.

The governing law (the Uniform Commercial Code or UCC) recognized the problem with respect to the "battle of the forms" where a seller responds to a purchase order by sending an acknowledgment containing different or additional terms in boilerplate which the typical buyer ignores. Before the UCC, the seller's response was a counter offer rejecting the buyer's purchase order. The seller would then ship the goods and when the goods were accepted, the buyer would be stuck with the seller's terms. The UCC changed that result so that any seller's term that "materially alters" the buyer's purchase order terms does not become part of the contract between merchants. The UCC, however, does not deal with the situation involving a boilerplate form signed by the buyer. In that situation, the general rule prevails: the buyer is bound. Again, however, the buyer had an opportunity to review the terms of the proposed contract, but simply chose to ignore that boilerplate.

Recent judicial decisions have constructed a new theory. The buyer orders a product, for example, by telephone, in person or, perhaps, through the Internet. The seller indicates it will ship the product at the price the parties have agreed upon. The buyer may have provided his or her credit card number to pay for the product. The product arrives and inside the box there are boilerplate terms, which had never been revealed, much less discussed. The terms may disclaim the buyer's implied warranties, limit the buyer's remedy to the return of the purchase price, state that any dispute must be resolved through arbitration rather than one's day in court, and, perhaps, other clauses. The same document will state that if the buyer does not object to these terms within a certain number of days, the buyer will be said to have accepted these "inside-the-box" terms—simply by saying nothing, i. e., silence is acceptance.

A buyer may argue that these "inside-the-box" terms are not effective because the contract was already formed when the deal was made via telephone, computer or in person. Not so, say these cases. You may have thought you made the deal at that time, but that was only the first "layer" of the contract. The contract is not formed until you receive the "inside-the-box" terms and do not object to them within the number of days printed on the sheet. When the days have expired, for the first time you have a contract, but it is a contract on the seller's terms. This is also known as the "rolling contract" theory. It is very popular in the purchase of software. The deal is made but when the software arrives in a box, the software license terms may be printed on the outside of the box which indicates that, by opening the box, you agree to the terms, or, again, the terms may be found inside the box. You may be said to accept such terms by tearing the plastic containing a software disk (a "shrinkwrap" license).

While several courts have indicated their agreement with this "layered" or "rolling" contract theory, a few courts disagree and the legal commentators are split in their reaction. It has caused considerable controversy and the law is unclear in many jurisdictions whose courts have yet to confront such cases. The argument in favor of making these hidden terms enforceable is one of "efficiency." If the seller had to disclose all of this boilerplate up front and have the buyer expressly agree to it, it would take forever. Imagine listening to someone read warranty terms to you on the telephone when you order a product through an 800 number. Since most buyers don't bother reading the boilerplate anyway, what difference does it make if it is not provided in advance of the contract? Finally, in many transactions, the buyer is not going to be able to change the seller's "standard" terms. They are often non-negotiable. There are, however, arguments on the other side. Suppose the boilerplate states that the seller warrants the product for 90 days from delivery and the product is something the buyer would reasonably expect to last for several years. On the 91st day, the product fails and cannot be repaired. Should a buyer be stuck with that kind of deal because of a term hidden inside the box? Suppose there is a defect in the product and the seller refuses to repair or replace it. The boilerplate states that you have to go to arbitration to adjudicate your dispute with this seller. You cannot sue the seller in a court of law in your hometown. You have to arbitrate the dispute in some location hundreds of miles away. Should you be stuck with that term simply because the seller enclosed it inside the box? The advocates of the "rolling" theory will claim that sellers will not include any bizarre or oppressive terms in their boilerplate because they will not be able to sustain their businesses against competition if their terms are harsh compared to other sellers' terms. This argument, however, places a great deal of reliance on more kindly and gentler sellers who will only include the terms that are necessary to allow them to sell the product at the price they charge. Without these terms, the price would have to be much higher. After all, there are plenty of sellers of all products and sellers only seek reasonable and fair profits, don't they?

Starting to feel uncomfortable? The unsettled law in this area suggests that buyers pay attention to an old legal saying, "Caveat emptor" or "Let the buyer beware."