Does it even matter what the contract says?
Our woes with Protection One continue, with many letters exchanged so far, but no resolution. Protection One is claiming that we have only a short window once a year in which we can cancel the contract, otherwise it becomes irrevocable for another year. I see no such language in the contract, nor was that my understanding of the meaning of the contract at the time it was signed.
This has led me to wonder: have we now entered an age when fair and reasonable business practices--and even consumer protection laws--have become circumvented by one-sided consumer contracts? To obtain almost any kind of service these days, from a credit card to a mobile phone to an airline ticket, requires signing or agreeing to a densely-worded contract which very few people can even understand, and which nobody actually gets the opportunity to negotiate.
A few examples:
Nearly all commercial software now comes with a "shrink-wrap" agreement of dubious enforceability. These agreements, which you supposedly agree to by opening or installing software, or clicking an "Agree" button during the use of the software, have been known to contain all kinds of weird provisions, like agreeing to be spammed, or giving the software company the right to delete data from your computer. Very few software companies allow you to inspect the agreement before buying the software, and once you open the package, it is often unreturnable--meaning that if you don't accept the agreement, you have no recourse for the money you spent. These contracts are often very long, and very few people actually read them to the end, much less comprehend all the nuances.
Airline tickets are governed by extremely complicated tariff provisions, which are (in theory) available to anyone to inspect upon request. These documents, however, are generally hard to find, and (I am told) excruciatingly long and complicated. For example, Northwest's website contains several references to something called "Domestic General Rule Tariff No. DGR-1" which is "available upon request" but not on their website. A call to Northwest's toll-free number yielded a confused agent who didn't know what I was talking about.
Credit card agreements are often running 8-10 pages of very small print in a pamphlet, and while readability has improved over the past several years, the legalese is still generally incomprehensible. Such important terms as termination charges, dispute resolution, and so forth, are often hidden, and few consumers have the legal savvy to understand exactly what rights they're giving up. Many credit card agreements now contain "mandatory binding arbitration" clauses which limit or even eliminate your ability to take the company to court. My Discover Card recently added a clause which required Discover's consent before I can join a class-action lawsuit against them. Imagine that! I need their consent to sue them!
Even more amazing, in many cases, the companies don't even care what their own contracts say, unless there's an actual lawsuit--which almost never happens, because the dollar amounts at stake are too small. My company is doing a contest where we're asking for customer service horror stories, and we've gotten quite a few entries relating events where companies would unilaterally extend the length of a contract, impose fees, and so forth, against the terms of their own contracts. These situations can be very hard to fix, since most customer service reps are trained to believe whatever the computer tells them. Until there's a lawsuit, and the company is forced to document its actions, there's little the consumer can do other than refuse to pay the bill--which then gets sent to a collection agency.
Furthermore, a common clause in many consumer contracts is one which allows the company to unilaterally change the terms of the agreement with little opportunity for the consumer to refuse, short of canceling the contract altogether.
This raises a huge issue of business ethics. It is not ethical for a company to impose a contract upon its customers without a reasonable expectation that most customers will (a) fully understand the contract before signing it, (b) have a reasonable opportunity to refuse to the terms of the contract, and (c) have a reasonable chance to review the contract before agreeing to it.
As contract law is classically understood, those points are required for a contract to be binding. Unfortunately, we have somehow morphed into a system where, if the customer didn't understand the contract, it is considered the customer's fault, no matter how opaque the language or absurd the provision. $200 cancellation fee? Too bad, it was in the contract. Want to keep your data private? Sorry, you signed away that right. Not our fault if you didn't read the whole contract.
Amazingly, there doesn't seem to be any good reason for companies to behave this way. With a very small number of exceptions, most big companies are upfront and straightforward about their daily business practices (the exceptions are typically companies which are overtly playing games of "gotcha!" with their customers. Most companies don't do this, because word gets around). Most of these dense, impenetrable contracts could be boiled down to a half-page or less of "Terms and Conditions," and the cost of making these T&C's available (on a website, or a package box) would be minimal.
I would argue, in fact, that probably 95% of the bulk of these consumer contracts is legal language inserted to protect the company against extremely unlikely or unusual events.
Lawyers love to dream up extremely improbably but potentially disastrous scenarios, and then insist on contract language to protect against those events. I know this firsthand, having been through these discussions with our corporate counsel during contract negotiations. Most 57-page contracts can be boiled down to a page of plain-English terms, and the caveat that "If something unexpected happens, use your common sense."
This same dynamic plays into consumer contracts, but with an insidious twist. Because the company gets to essentially dictate the terms of the contract, the lawyers put in pages and pages of conditions. Why does every software shrink-wrap agreement state that the software is licensed "as-is"? Because companies are deathly afraid that they'll get sued for bugs under consumer protection laws (actually, maybe not such a bad idea....). The actual business practices of most software companies, though, is to issue patches and bug-fixes, which implies that they're not really selling the software "as-is."
But, once you get up to several pages of impenetrable legalese, it gets very easy for unethical companies to insert "gotcha" clauses. This is where the credit card company states that "payments are due by 4 AM local time on the due date printed on the statement" (actual term in a credit card agreement), effectively making the real due date the day before the date printed on the statement, since the mail doesn't arrive at the processing center until 11 AM.
I would argue that the only ethical way for a consumer-oriented company to treat its customers is to:
Make any customer contract or agreement available ahead of time, preferably online, in its complete form.
Write all customer contracts in plain English, one page or less of 12-point type, with any unusual terms clearly highlighted.
Eliminate any terms allowing the company to change the contract without the express consent of the customer.
For most reputable companies, point 1 should be a no-brainer, and some already do this (sadly, not enough). Some companies even do reasonably well on point 2, though I've yet to see a consumer contract which I truly consider readable and understandable for the average consumer (maybe I can make a project of rewriting some contracts as examples). Point 3 is where most consumer companies will scream: few companies, I suspect, would be willing to give up the right to make contract changes unilaterally (would you?). But most changes I've observed are either (a) new fees--which shouldn't be buried in a 15-page contract anyway; or (b) adding terms to protect against unlikely events.
There are also certain terms which simply have no place in consumer contracts, and should be outlawed. Things like giving up the right to sue in court, disclaiming various warranty and other consumer protections, and giving up other rights a consumer would normally have.