The problem is simply that people don't read this stuff in the first place. They simply sign without reading, assuming/hoping/praying that the terms are reasonable.
And really, can you blame them? Contracts are so vastly overused and they're made with the assumption that the consumer isn't going to read them. Most companies won't give you a two-page contract if a twenty-page contract will do. Many contracts are excessively long and are part of a sales process built on speed that assumes nobody will take the time to read before signing.
I would like to see a change in how contracts are handled, such that if one side knows the other side didn't read before signing, the contract is void. That wouldn't take care of everything (American Express's contract is probably handled by mail, so they can reasonably expect you to read the contract at leisure in your home before you sign) but it would put a stop to abusive situations in retail, where they had you a bunch of paperwork to sign. If they had to actually watch you and make sure you read it all before signing, the contracts would probably become a lot shorter. If people got used to reading the things, then it might even change their habits for other scenarios like doing stuff through the mail.
However, I also think it is completely insane that contracts are allowed to put any restrictions on either party's access to courts. The whole point of courts is to be the arbiter when something goes wrong. A clause saying that you must use some third-party arbitration service instead of the courts, or a clause saying that you agree not to participate in class-action lawsuits, should be completely unenforceable, just like a clause that says you agree to become the other party's slave.
There is already specific law in some jurisdictions which reduces the applicability of this kind of consumer take-it-or-leave-it contract: see https://en.wikipedia.org/wiki/Contract_of_adhesion.
1. Because long contracts would immediately cause hugely increased costs for these companies if they had to wait for every customer to read them, they would greatly reduce the length and complexity of their contracts.
2. The most unconscionable clauses are also often the least necessary, so they would likely be the first to go. Of those that remain, the consumer is now much more likely to both read and understand them.
3. Because everybody is reading the contracts, they'll become aware of unconscionable clauses immediately, rather than only when they get bitten, or when they see some news story like this one.
4. Because everybody knows they're in there, competitive pressure or widespread outcry should force the removal of any remaining unconscionable clauses. (In theory this should happen now, but in practice people mostly don't know the clauses are there in the first place.)
Reading the whole contract as an individual wouldn't change much (although I think it's a good idea anyway), but I think that forcing everyone to read them would change a lot.
It is all about bargaining power.
No, and that's the whole point. If courts nullified contracts that even a reasonable person would "sign" without reading, phonebook contracts would carry enforcement risk, discouraging the practice.
The real problem here is that companies tend to have their own legal counsel writing these documents, but customers don't have their own legal counsel reading them and advising them about potential pitfalls.
And even if you could force people to read them, you can't force them to understand them, which is really what's necessary for your plan to work. Those contracts are generally written by lawyers for other lawyers. To understand them you need the IQ of a lawyer and a fair bit of their education. Not being able to get an oil change until you've done a semester of contract law is something that nobody's going to be happy about.
You seem to be implying that many people on HN do read them, and if that's the case, I would be very surprised. I certainly don't. There's frequently a new EULA I have to consent to when I update iOS, or iTunes, or some app, or sign into a cloud console, and the list goes on. If I read all of them it would probably add up to a good workday every week. I'm willing to bet that the number of people who are willing to devote that large a chunk of their lives to reading EULAS is somewhere near zero.
I said that "most consumers" could understand what contracts say if they actually read and put in effort to understand them.
I said that "people," meaning basically everybody, don't read contracts in the first place.
"Most consumers" and "sign without reading" aren't together in my original comment, either in space or meaning!
In any case, I certainly didn't mean to imply that HN readers are any different in either respect. I'm sure most HN readers could understand contracts, and I'm also sure that almost none of them actually read the boilerplate ones.
I wonder in what sense these agreements are enforceable when they cannot prove that people actually agreed with them? Hard copies of contracts are kept for a reason, I always assumed.
When there's a EULA or similar, the company is trying to form a contract with you, usually with lots of unfair terms.
If replacing the text with your own and clicking a button that you renamed from Agree to Disagree voids the whole thing, well, mission accomplished.
There would only be a problem if the law says that not only does your modification not form a contract, but that you acted in such bad faith that you actually still somehow agreed to the original contract.
that's not the problem. I see these arbitration clauses all the time, yet I sign anyway. Because I can't function without a credit card, without a cellphone, without internet hookups to my house, etc. It's not reasonable to say that I have to forego these services, or that I need to carefully shop for those vanishingly few providers that currently don't have such a clause, only for them to add one in when the contract renews in a year.
What choice does the consumer really have if these clauses are unavoidable?
edit: waqf's comment makes this point way better.
Either the government needs to create enough competition in the market such that consumers have choice on these issues, or the government needs to advocate for the consumers.
I think this could also be pulled off by somebody like Costco. They already have a big membership and strong negotiating power. And a large part of their job is sorting through many possible merchandise options and only providing the good ones to their members. It'd be nice to see them take it a step further.
Having the reading comprehension to read that is very different from the required legal comprehension to understand it. Customers who do read every contract they sign and see a clause about individual arbitration will have to parse it under the legal context in which the statement is put.