paper_title: Contracts in the Age of Smart Readers

authors: Yonathan A. Arbel and Shmuel I. Becher

citation: Yonathan A. Arbel & Shmuel I. Becher, Contracts in the Age of Smart Readers, 90 Geo. Wash. L. Rev. 83 (2022)

source_type: final published PDF

section: Introduction and Part I, Smart Readers: Technology and Capabilities

claim: Language-model smart readers can change consumer contracting by simplifying, personalizing, constructing, and benchmarking boilerplate

thick_description: Professors Yonathan A. Arbel and Shmuel I. Becher claim, in “Contracts in the Age of Smart Readers” on pages 83–94, that language models can become inexpensive, widely accessible smart readers of contracts, disclosures, and privacy policies. They organize the technology around four capabilities: translating difficult text into usable explanations, personalizing presentation to the reader, constructing legal consequences from terms, and benchmarking one contract against market alternatives. This is significant because contract law has long treated unread boilerplate as a stubborn human and institutional problem, while smart readers recast at least part of it as a technological problem whose solution can reshape assent, competition, and regulation. It connects to informed consent, consumer protection, legal automation, natural-language processing, boilerplate design, access to justice, and the allocation of responsibility when an automated explanation is wrong.

significance: The framework identifies a general-purpose intermediary between consumers and standardized text and makes its market-wide and doctrinal consequences a subject for contract law before adoption is widespread.

connections:
consumer boilerplate
informed assent
natural-language processing
legal automation
consumer protection
access to justice

limitations: The article uses early GPT-3 outputs selected to illustrate future capabilities, expressly acknowledges errors and weak reliability, and evaluates smart readers against realistic alternatives such as nonreading rather than against perfect legal advice.

evidence_summary: The abstract and introduction define smart readers, preview four capabilities and their benefits and risks, demonstrate early outputs for difficult clauses, and frame the article as a forward-looking inquiry into adoption, market consequences, and legal response.

review_status: machine-drafted-source-checked


section: Part I.A, Simplification

claim: Smart readers can make dense contracts accessible through more than mere shortening, but simplification necessarily risks losing meaning

thick_description: Professors Yonathan A. Arbel and Shmuel I. Becher claim, in “Contracts in the Age of Smart Readers” on pages 95–99, that smart readers can reduce contractual complexity by summarizing, lowering the language register, shortening and restructuring sentences, changing formatting, removing nonessential material, and adding examples or a more engaging voice. Their lease and at-will-employment examples show that an explanation can be easier to process even when it is not shorter than the original. This is significant because the proposal addresses several sources of unreadability at once instead of assuming that a shorter disclosure is automatically a comprehensible one. It connects to plain-language drafting, disclosure design, cognitive load, legalese, contractual bloat, and lossy compression, while the model’s serious legal mistake about discrimination illustrates why accessibility and accuracy must be evaluated separately.

significance: Simplification could expose obligations otherwise buried in prolix text, but it also reveals that a fluent and entertaining explanation can conceal substantive legal error.

connections:
plain language
contract design
cognitive load
legalese
lossy compression
AI hallucination

limitations: Summarization inevitably omits information; some contractual length serves precision; and the demonstrated model produced a major legal error, so readable output is not necessarily reliable output.

evidence_summary: The section identifies semantic difficulty, length, formatting, and legalese as barriers, compares original lease and employment clauses with model explanations, and characterizes smart-reader simplification as liberal, accessible, and necessarily lossy.


section: Part I.B, Personalization

claim: Consumer-side personalization can adapt a uniform contract to a reader’s language, cognition, culture, and intersecting characteristics without requiring the firm to know each consumer

thick_description: Professors Yonathan A. Arbel and Shmuel I. Becher claim, in “Contracts in the Age of Smart Readers” on pages 99–104, that the one-size-fits-all disclosure model fails because readers differ in language, culture, idiom, cognitive ability, socioeconomic circumstances, and preference for abstract or concrete explanation. A smart reader can personalize the presentation on the consumer’s device—translating and simplifying for a recent immigrant, explaining through examples for a teenager, adapting regional language, or combining several characteristics—without requiring the seller to collect the same information. This is significant because it moves personalization from the drafter’s side, where it is expensive and potentially exploitative, to the reader’s side, where it can serve comprehension. It connects to linguistic access, disability and cognitive accommodation, intersectionality, private dictionaries, the reasonable-consumer standard, and the difference between consumer-serving and seller-serving personalization.

significance: User-side adaptation could make a single standardized agreement intelligible to heterogeneous audiences while reducing firms’ informational and implementation burdens.

connections:
personalized disclosure
linguistic access
intersectionality
private dictionaries
reasonable consumer
consumer-side technology

limitations: Personalization does not reveal the substantive content of governing law, remains lossy, cannot completely eliminate divergent private meanings, and later sections show that personalization can also facilitate discrimination.

evidence_summary: The authors use Spanish-language, youth-oriented, concrete-example, regional-dialect, and intersectional examples to show how smart readers can tailor output and move parties toward shared dictionaries.


section: Part I.C, Construction

claim: Smart readers can sometimes explain the legal consequences of simple terms, although their construction cannot be authoritative and may implicate unauthorized-practice rules

thick_description: Professors Yonathan A. Arbel and Shmuel I. Becher claim, in “Contracts in the Age of Smart Readers” on pages 104–106, that understanding a contract requires more than parsing its words: readers often need construction of a term’s legal effect. They show a smart reader explaining the consequences of buying a car “as is” and answering whether brief foreign travel triggers a permanent-residence default clause. This is significant because it positions the technology not merely as a readability aid but as a low-cost source of preliminary legal orientation for ordinary questions. It connects to the interpretation-construction distinction, consumer legal education, follow-up questioning, unauthorized practice of law, and the comparative baseline of what a reasonable lawyer—or an unaided consumer—would provide.

significance: Even limited legal construction could make routine rights and obligations usable without professional help, expanding the technology’s role beyond textual simplification.

connections:
contract interpretation
legal construction
consumer legal education
unauthorized practice of law
interactive legal tools
legal consequences

limitations: Construction is contested even among lawyers and judges; outputs are nonauthoritative, can omit defenses and state-law variation, and should be judged differently for mundane and penumbral questions.

evidence_summary: The section distinguishes construction from linguistic interpretation, tests the model on an as-is sale and residence clause, and cautions that legal disagreement and unauthorized-practice concerns constrain this capability.


section: Part I.D, Benchmarking

claim: Benchmarking can reduce comparison costs by scoring contract terms against the market and directing consumers to better alternatives

thick_description: Professors Yonathan A. Arbel and Shmuel I. Becher claim, in “Contracts in the Age of Smart Readers” on pages 106–109, that benchmarking may be the most powerful smart-reader capability because it can score a contract relative to market practice, explain the score, and point the consumer toward sellers with better terms. Privacy-policy classifiers and PrivacyCheck illustrate how a model can identify clauses, compare an agreement to its sector, and compress a difficult choice into a familiar ranking. This is significant because consumers need not master every clause for contract quality to become a salient product attribute. It connects to comparison shopping, search costs, choice overload, reputation systems, privacy nutrition labels, term competition, and the accumulation of contract corpora that can improve market-specific comparisons.

significance: A usable score can translate opaque legal variation into demand pressure and make contracts part of ordinary product comparison even when full readership remains rare.

connections:
contract benchmarking
comparison shopping
search costs
choice overload
privacy policies
reputation scores

limitations: Contract scoring is nascent and contestable, depends on normative judgments and relevant comparators, and cannot yet rival a seasoned lawyer; its value rests on improvement over intuitive nonreading, not perfect accuracy.

evidence_summary: The authors discuss machine classification of privacy provisions, a deployed browser tool that scores policies against market averages, explanatory rankings, competitor links, and the practical value of imperfect scores.


section: Part II, Smart Reader Uptake and (No) Reading Theories

claim: Observed adoption of smart readers can discriminate among competing explanations for why consumers do not read contracts

thick_description: Professors Yonathan A. Arbel and Shmuel I. Becher claim, in “Contracts in the Age of Smart Readers” on pages 109–114, that smart-reader uptake will depend not only on price and interface but on why consumers currently avoid contracts. Readability theory predicts strong adoption; transactional-expectations theory predicts use mainly in unfamiliar or high-stakes domains; rational-apathy theory predicts uptake when automated review materially lowers cost; cognitive-bias theories predict selective use by consumers aware of their limitations; and social-norm theories predict more private than face-to-face use. This is significant because adoption becomes a Wittgenstein’s-ruler test: a tool that removes the barrier posited by a theory also supplies evidence about whether that theory was sound. It connects to empirical consumer behavior, the privacy paradox, rational ignorance, transactional norms, behavioral bias, technology adoption, and the design of subsidies or interfaces.

significance: Even low uptake would be theoretically informative, while the combined theories make modest, heterogeneous adoption more plausible than either universal use or total rejection.

connections:
no-reading theories
technology adoption
rational apathy
transactional expectations
cognitive bias
social norms
Wittgenstein's ruler

limitations: The authors do not predict a single adoption rate; effectiveness, cost, business model, conflicts of interest, UI/UX, domain, social setting, and consumer heterogeneity remain unresolved empirical variables.

evidence_summary: Part II maps five theories of nonreading to distinct uptake predictions, discusses technical and economic feasibility, and explains how actual adoption can test the causal accounts behind consumer-contract policy.


section: Part III.A, Matching, Search Costs, and Market Competition

claim: Modest use of imperfect smart readers can improve individual matching and generate market-wide pressure for better contract terms

thick_description: Professors Yonathan A. Arbel and Shmuel I. Becher claim, in “Contracts in the Age of Smart Readers” on pages 114–118, that greater term transparency has both micro and macro effects. Individually, consumers can find contracts better matched to their preferences and reduce search costs; collectively, even a minority that reads simplified terms or checks scores may exert enough demand pressure to improve standardized terms for everyone. This is significant because smart readers can revive a modest informed-minority theory without requiring most consumers to read contracts in full. It connects to product-attribute competition, shrouded terms, privacy markets, market entry, consumer activism, watchdog journalism, regulatory supervision, reputational pressure, and the spotlight effect on contract drafters.

significance: The claim explains how limited adoption can produce positive spillovers, including in imperfect or concentrated markets where informed consumers, entrants, watchdogs, and regulators can change firm incentives.

connections:
informed minority
term competition
search costs
consumer matching
market entry
consumer activism
positive spillovers

limitations: The dynamics depend on consumers caring about terms and on some mechanism for demand, entry, advocacy, or regulation; unequal access and firms’ ability to identify informed users can undermine the spillover.

evidence_summary: The section connects transparency to matching and welfare, explains the informed-minority mechanism, works through privacy-policy and search-engine examples, and adds watchdog, agency, reputational, and moral channels of pressure.


section: Part III.B, Errors and Adversarial Attacks

claim: The most serious smart-reader risks arise from correlated error and deliberate adversarial manipulation, not simply from isolated mistakes

thick_description: Professors Yonathan A. Arbel and Shmuel I. Becher claim, in “Contracts in the Age of Smart Readers” on pages 118–124, that error must be evaluated comparatively and by type. Random errors may cancel in large markets, and an inexpensive, consistent tool can help even when it underperforms a lawyer because the realistic alternative is often no reading; correlated errors can systematically distort particular clauses; and adversarial examples let firms subtly alter text or formatting so a machine produces a seller-favorable interpretation invisible to a human reader. This is significant because the black-box reader creates a new strategic drafting surface on which apparent contract language and machine-perceived language can diverge. It connects to machine-learning security, correlated bias, platform contract scores, adversarial examples, conspicuousness doctrine, ALL-CAPS disclosures, strategic boilerplate, and the difference between replacing nonreading and replacing legal counsel.

significance: The taxonomy shows why aggregate benefits can coexist with concentrated harms and why maliciously induced errors require a different legal response from ordinary model imperfection.

connections:
adversarial machine learning
correlated error
black-box systems
conspicuous disclosure
strategic drafting
comparative accuracy

limitations: The authors expect substantial near-term error and acknowledge that their illustrations are cherry-picked; gradual adoption may bound harm, but sophisticated attacks can transfer across models and be extremely difficult to distinguish from innocent design choices.

evidence_summary: The section compares human and machine performance, distinguishes isolated, correlated, and adversarial errors, demonstrates hidden-text and visual attacks, and analogizes machine manipulation to courts’ slow response to ineffective ALL-CAPS drafting.


section: Part III.C, Access to Justice

claim: Low-cost smart readers can scale basic know-your-rights assistance where subsidized human legal services cannot

thick_description: Professors Yonathan A. Arbel and Shmuel I. Becher claim, in “Contracts in the Age of Smart Readers” on pages 124–126, that smart readers can relieve part of the access-to-justice deficit by providing on-demand explanations of contractual rights. A consumer like Ms. Williams, confronted with an obscure cross-collateral clause, could receive a warning, an explanation, and perhaps a referral to better alternatives on a device she already owns. This is significant because human legal subsidies face severe scaling limits, whereas software can distribute preliminary legal information at low marginal cost to people excluded by price, geography, and repeat-player advantage. It connects to legal deserts, legal aid, know-your-rights tools, smartphone access, repeat-player theory, consumer education, and the use of automation to complement rather than simply replace lawyers.

significance: The relevant comparison for many consumers is not a smart reader versus excellent counsel but a smart reader versus unaided judgment, making imperfect assistance potentially valuable at scale.

connections:
access to justice
legal deserts
legal aid
know-your-rights services
repeat players
digital inclusion

limitations: Smart readers are unlikely to match lawyers in the short or medium term; smartphone ownership does not eliminate the digital divide; and automated advice can itself contain bias or error.

evidence_summary: The authors describe cost, repeat-player, rural, and social barriers; explain why lawyer subsidies do not scale; and revisit the Williams cross-collateral example to illustrate low-cost, on-demand assistance.


section: Part III.D, Compliance and Overcompliance

claim: Better contractual awareness can reduce accidental breach but can also induce harmful compliance with illegal or unenforceable terms

thick_description: Professors Yonathan A. Arbel and Shmuel I. Becher claim, in “Contracts in the Age of Smart Readers” on pages 126–127, that clearer awareness, comprehension, and recall can improve compliance by both consumers and sellers, reduce accidental breach, and help consumers invoke promises such as repair or cancellation rights. The same clarity can be harmful when readers assume every written term is valid and morally binding, because form contracts often contain illegal or unenforceable provisions. This is significant because it rejects the simple premise that more reading is always pro-consumer. It connects to unenforceable noncompetes, exculpatory terms, chilling effects, the moral psychology of promise, legal literacy, disclosure policy, and the difference between identifying contractual text and assessing its enforceability.

significance: A smart reader that accurately reports what a document says but fails to distinguish legal validity may strengthen the behavioral force of abusive terms.

connections:
contract compliance
overcompliance
unenforceable terms
moral obligation
legal literacy
disclosure effects

limitations: The direction of the effect depends on whether the tool can contextualize enforceability and remedies; improved recall is beneficial for valid obligations but potentially harmful for vulnerable clauses.

evidence_summary: The section identifies compliance benefits, then draws on studies of noncompetes, exculpatory clauses, and lay beliefs to argue that readable terms can acquire excessive legitimacy and deter valid claims.


section: Part III.E, Discrimination and Personalization

claim: Smart readers can expose discriminatory contract personalization while also enabling firms to discriminate between users and nonusers

thick_description: Professors Yonathan A. Arbel and Shmuel I. Becher claim, in “Contracts in the Age of Smart Readers” on pages 127–131, that personalization has opposite distributive possibilities depending on who controls it. A consumer-side reader can flag unusually harsh interest rates, tailor explanations to people excluded by the imagined white, educated, male reasonable consumer, and make intersectional accommodation feasible. But firms may identify likely smart-reader users, give them favorable terms, and finance those benefits through worse terms for less informed or digitally excluded consumers. This is significant because a technology capable of resisting individualized exploitation can itself become a basis for market segmentation and regressive cross-subsidy. It connects to algorithmic redlining, proxy discrimination, reasonable-consumer doctrine, big-data scoring, digital inclusion, disparate treatment, intersectionality, and the informed-minority assumption that firms cannot identify who is informed.

significance: The analysis shows that consumer empowerment does not automatically produce universal spillovers when sellers can separate sophisticated users from everyone else.

connections:
algorithmic discrimination
contract personalization
digital divide
reasonable consumer
market segmentation
regressive cross-subsidy
intersectionality

limitations: Benchmarking needs an appropriate comparison group, personalized markets make comparators harder to identify, individual alerts cannot solve systemic discrimination, and mimicry is unavailable to consumers facing deeper digital barriers.

evidence_summary: The section contrasts seller-side targeting with consumer-side accommodation, explains benchmarking’s protective potential, and develops a separating-equilibrium risk based on firms’ growing ability to score and identify consumers.


section: Part III.F, Nudging with Smart Readers

claim: Smart readers create a new channel for countering cognitive overload, risk myopia, and price manipulation at the moment of contracting

thick_description: Professors Yonathan A. Arbel and Shmuel I. Becher claim, in “Contracts in the Age of Smart Readers” on pages 131–133, that smart readers can function as consumer-side nudges against several recurring decision failures. They can reduce cognitive overload through summaries, scores, and accessible formatting; counter optimism and myopia by making warranties, return policies, and future risks salient; and defeat partitioned or psychologically manipulative pricing by calculating and presenting a rounded total transaction price. This is significant because the technology supplies a personalized intervention channel at the point when boilerplate and pricing architecture shape choice. It connects to behavioral law and economics, salience, cognitive overload, smart disclosure, choice architecture, drip pricing, left-digit effects, and field experimentation on consumer debiasing.

significance: Rather than merely transmitting more information, a smart reader can restructure information to counter the way sellers exploit limited attention and predictable bias.

connections:
behavioral nudges
cognitive overload
risk salience
partitioned pricing
choice architecture
smart disclosure

limitations: The tool cannot address every bias, and whether these interventions actually improve decisions is an empirical question that requires testing by researchers and consumer organizations.

evidence_summary: The section identifies three target problems, explains how summaries and formatting reduce overload, how salience can counter optimism and myopia, and how whole-transaction calculations can expose price partitioning.


section: Part IV.A, The Challenge to Consumer Protection

claim: If smart readers materially solve nonreading, consumer-contract interventions cannot continue to rely on information failure without reexamining their justification

thick_description: Professors Yonathan A. Arbel and Shmuel I. Becher claim, in “Contracts in the Age of Smart Readers” on pages 133–136, that lack of reading may increasingly become a technological challenge rather than an immutable ethical premise for legal intervention. Because the no-reading problem supports positions across the debate over the Restatement of Consumer Contracts—including relaxed formation, unconscionability review, and skepticism toward merger clauses—effective smart readers could make some rationales dated and redirect policy toward adoption. This is significant because it asks whether consumer law is future-proof when a foundational account of informational asymmetry changes. It connects to meaningful assent, merger clauses, unconscionability, mandatory disclosure, the Restatement of Consumer Contracts, the Schumer Box, warranty regulation, and the distinction between informational, market, and reputational failures.

significance: The argument separates legal protections that depend on unreadability from protections grounded in independent fairness or market concerns, allowing doctrine to evolve without assuming smart readers end consumer vulnerability.

connections:
consumer-contract Restatement
meaningful assent
unconscionability
merger clauses
mandatory disclosure
future-proof regulation

limitations: Solving reading does not solve bargaining power, market failure, reputational failure, bias, or unfair terms; the authors therefore do not predict the end of consumer protection or endorse immediate deregulation.

evidence_summary: The section traces no-reading rationales through the Restatement debate and disclosure mandates, then argues that growing smart-reader sophistication may shift policy toward uptake while leaving other justifications intact.


section: Part IV.B, Courts and Agencies

claim: Courts and agencies can use language models to structure corpus-based interpretation and prioritize suspicious contract terms

thick_description: Professors Yonathan A. Arbel and Shmuel I. Becher claim, in “Contracts in the Age of Smart Readers” on pages 136–137, that institutions as well as consumers can benefit from smart readers. Courts could operationalize corpus linguistics by using language models to estimate contextual frequencies rather than relying only on introspection or dictionaries, while agencies could scan sector-wide contract sets and flag offensive, suspicious, or unusual terms for human attention. This is significant because it treats automation as a way to allocate scarce judicial and enforcement attention, not only as a retail advice product. It connects to ordinary meaning, corpus linguistics, dictionary use, regulatory triage, supervisory technology, sectoral benchmarking, and human review of algorithmically flagged cases.

significance: Institutional use can make contextual evidence easier to access and conserve enforcement resources even when model outputs are not precise enough to decide cases autonomously.

connections:
corpus linguistics
ordinary meaning
judicial interpretation
regulatory technology
enforcement triage
contract surveillance

limitations: Usage frequencies do not themselves resolve normative meaning, the authors’ numerical example is hypothetical, and agency flags require human investigation because smart readers remain imperfect.

evidence_summary: The authors contrast dictionaries with corpus evidence, illustrate probabilistic usage analysis, and propose agency processing of industry contracts to focus limited resources on irregular terms.


section: Part IV.C.1, Allocation of Error Costs

claim: Existing contract doctrines tend to place innocent smart-reader error on consumers, but a better regime would share incentives through machine-readable disclosure of key terms

thick_description: Professors Yonathan A. Arbel and Shmuel I. Becher claim, in “Contracts in the Age of Smart Readers” on pages 137–140, that ordinary mistake, misrepresentation, misunderstanding, and duty-to-read doctrines offer consumers little recourse when an independent smart reader misstates a contract. Producer liability may improve technology but also raise price and chill entry, while neither buyer nor seller fully controls the risk. They therefore propose adapting conspicuousness, contra proferentem, or the Restatement’s duty to warn so key terms must be disclosed in a smart-reader-friendly form as a condition of enforcement. This is significant because it frames model error as a legal-accident problem requiring incentive-compatible loss allocation rather than automatically blaming the user or developer. It connects to mistake doctrine, misunderstanding, products liability, autonomous-system accidents, conspicuous disclosure, contra proferentem, Restatement section 211, and machine-readable contracting.

significance: A smart-reader-friendly disclosure rule could give sellers control over preventable parsing risk while preserving incentives for consumers and developers and avoiding exclusive liability at either endpoint.

connections:
allocation of error costs
mistake doctrine
products liability
conspicuousness
contra proferentem
machine-readable terms
Restatement section 211

limitations: The proposal is tentative; seller control over third-party apps is limited, producer liability can suppress beneficial adoption, consumer nonreading complicates cheapest-cost-avoider analysis, and no single party is clearly best positioned to prevent every error.

evidence_summary: The section tests standard doctrines against several innocent-error hypotheticals, analyzes producer, buyer, and seller incentives, and proposes enforcement-conditioned disclosure of key terms in reader-friendly form.


section: Part IV.C.2, The Duty to Read

claim: Courts should not expand the duty to read merely because smart readers appear cheap and accessible

thick_description: Professors Yonathan A. Arbel and Shmuel I. Becher claim, in “Contracts in the Age of Smart Readers” on pages 140–141, that courts and legislatures may prematurely treat smart-reader access as a stronger opportunity to understand contracts and correspondingly expand the duty to read. Repeat players may promote that expectation, fluent demonstrations may obscure technological weakness, and policymakers may try to force adoption through doctrine. This is significant because a legal presumption of technological competence can arrive before reliable tools and equal access do, converting a promised aid into a new burden on consumers. It connects to clickwrap and browsewrap, constructive notice, strategic technology mandates, digital inequality, regressive cross-subsidies, and the institutional lag between technical reality and judicial doctrine.

significance: Restraint preserves room for gradual development and empirical learning and prevents uneven access from hardening existing inequalities through stronger enforcement of unread terms.

connections:
duty to read
constructive notice
clickwrap
browsewrap
digital divide
premature regulation
consumer inequality

limitations: Maintaining the existing rule may modestly reduce incentives to adopt useful readers, but the authors regard that cost as smaller than the danger of doctrine outrunning reliability and access.

evidence_summary: The section explains the current duty-to-read rule, identifies repeat-player, judicial-capacity, and strategic-adoption pressures for expansion, and warns that unequal technology access can make a stronger rule regressive.


section: Part IV.C.3, The Problem of Adversarial Attacks

claim: Because adversarial contract manipulation is hard to detect and prove, legal response will require imperfect combinations of burden shifting, deterrence, and regulatory monitoring

thick_description: Professors Yonathan A. Arbel and Shmuel I. Becher claim, in “Contracts in the Age of Smart Readers” on pages 141–143, that adversarial attacks resist ordinary enforcement because innocuous-looking choices of spacing, fonts, word order, color, register, or margins can mislead models, while intent is difficult to prove and contract remedies rarely include punitive damages. Statistical evidence that a document misleads a sample of readers might justify shifting the burden to the drafter, and agencies could monitor formatting for suspicious patterns, but both approaches can also penalize innocent drafting for technical model failures. This is significant because neither traditional fraud doctrine nor purely technical detection supplies a comprehensive answer to strategic machine-facing boilerplate. It connects to res ipsa loquitur, burden shifting, optimal penalties for low-detection violations, punitive damages, fraud, CFPB and FTC monitoring, adversarial robustness, and the distribution of false-positive costs.

significance: The proposal identifies complementary institutional tools while preserving the central tradeoff between deterring manipulation and imposing liability on sellers who do not control smart-reader design.

connections:
adversarial attacks
burden shifting
punitive damages
fraud
regulatory monitoring
CFPB
FTC
false positives

limitations: Every proposed response is incomplete: attacks may be invisible, intent evidence scarce, penalties constrained, statistical error endemic, and agencies’ own smart readers vulnerable to the same manipulations.

evidence_summary: The section catalogs possible textual attack surfaces, explains detection and proof obstacles, considers high penalties and fraud, evaluates statistical burden shifting, and recommends ongoing agency and consumer-organization attention.


section: Part IV.C.4, Bias and Discrimination

claim: Law should prepare for discrimination based on smart-reader use before data-driven personalization becomes entrenched

thick_description: Professors Yonathan A. Arbel and Shmuel I. Becher claim, in “Contracts in the Age of Smart Readers” on pages 143–145, that big-data personalization reverses the old presumption favoring individualized over standardized contracts. If firms offer better terms to smart-reader users and worse terms to nonusers—especially when usage correlates with race or other protected characteristics—the practice can create regressive transfers and eliminate the technology’s positive market spillovers. Unfairness or deception law may reach some instances, but market segmentation doctrine, injury standards, material-omission proof, and benign uses of personalization make a blanket ban undesirable. This is significant because intervention becomes harder after firms collect usage data and build reader status into pricing and contract design. It connects to unfair or deceptive acts and practices, proxy discrimination, algorithmic segmentation, material omissions, freedom of contract, protected classes, precautionary regulation, and path dependence in data markets.

significance: The authors identify a time-sensitive governance problem: early attention may preserve inclusive benefits that later market architecture would make difficult to restore.

connections:
UDAP law
proxy discrimination
market segmentation
material omission
freedom of contract
precautionary regulation
data-driven contracts

limitations: The legal balance depends on values and future evidence; personalization has legitimate uses, current unfairness and deception theories are contestable, and the authors raise the issue for research rather than prescribe a categorical prohibition.

evidence_summary: The final substantive section analyzes discrimination by reader status, tests unfairness and deception theories, rejects a blanket ban, and urges precaution before data collection and tailored treatment become entrenched.