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The electronic marketplace poses novel issues for contract law. Contracts created through browsewrap, clickwrap, and shrinkwrap (contracts whose embedded terms are only available after purchase) poorly fit doctrines that emerged from face-to-face offer and acceptance, the mutual execution of a common set of documents, or the rituals of mass market transactions involving physical fine print. Not surprisingly, these contracts of the new electronic marketplace require doctrinal elaboration. Our Article asks not about the specific resolution of new doctrinal challenges, but about how the common law of contracts will be elaborated. Specifically, the Article begins with empirical observations about the domain of all electronic and shrinkwrap contract cases and makes four critical findings. First, we document two shifts: One arises from a steady decline in the number of cases adjudicated in state court relative to federal courts, which by 2015 adjudicate the vast majority of cases in this area. The other stems from a rise in class actions, which is intimately tied to the migration of cases to federal court. The result is that today the vast majority of cases dealing with electronicallytransmitted and "terms later" contracts are class actions brought in federal court. The increase in class actions is not surprising given the relatively small stakes of most transactions and the little incentive consequently created for individual consumer litigation. We hypothesize that the increased dominance of the federal forum is in part likely a reflection of the federalization of class action law under the Class Action Fairness Act (CAFA). Second, the consequence of the dominance of the federal forum is that the common law is being elaborated in federal court in suits arising under diversity jurisdiction. In turn, those federal courts are largely bereft of any state law moorings as they develop the common law of the electronic marketplace. Erie Railroad v. Tompkins notwithstanding, the common law is driven by federal court decisions, building incrementally on each other rather than state law. Third, the development of common law in federal court means that there is no apex court that can define conclusively the law of any jurisdiction. When state common law cases develop organically through the state court system, the natural progression from trial court to appellate review to final review in the state supreme court would yield a definition of the substantive law of any particular jurisdiction. When, however, the case law is being driven by federal courts anticipating what state common law should be, the same process of common law filtration does not reach conclusive resolution. Diversity jurisdiction allows federal courts to predict how they believe state common law would develop, but binds no state courts in the affected jurisdiction, and does not even bind federal courts in the same circuit putatively applying the law of another state. The law develops in fits and starts as doctrines assume persuasive influence as opposed to the command status that the ruling of a state high court would have. Rather than the law resolving hierarchically, we identify a "tournament effect" in which the law settles on one or a few influential decisions, regardless of the state lawthat the casemay have arisenunder. The tournamentwinner, usually a circuit courtopinion, establishes the new standard and is followed by subsequent courts, including state high courts. Finally, we conjecture that the use of contractual clauses compelling arbitration and forbidding claim aggregation may have affected the number of cases being adjudicated in court and, consequently, depressed the development of publicly available law in this area. [ABSTRACT FROM AUTHOR]

Is contracting for the collection, use, and transfer of data like contracting for the sale of a horse or a car or licensing a piece of software? Many are concerned that conventional principles of contract law are inadequate when some consumers may not know or misperceive the full consequences of their transactions. Such concerns have led to proposals for reform that deviate significantly from general rules of contract law. However, the merits of these proposals rest in part on testable empirical claims. We explore some of these claims using a hand-collected data set of privacy policies that dictate the terms of the collection, use, transfer, and security of personal data. We explore the extent to which those terms differ across markets before and after the adoption of the General Data Protection Regulation (GDPR). We find that compliance with the GDPR varies across markets in intuitive ways, indicating that firms take advantage of the flexibility offered by a contractual approach even when they must also comply with mandatory rules. We also compare terms offered to more and less sophisticated subjects to see whether firms may exploit information barriers by offering less favorable terms to more vulnerable subjects. [ABSTRACT FROM AUTHOR]

Standard-form contracting is the engine of the mass-market economy, yet we know little about what drives it and what factors are associated with its evolution. Understanding change and innovation of the substance, length, and complexity of fine print in the consumer context can help regulators identify sources of potential intervention as well as help them evaluate the effectiveness of mandatory disclosure regimes, which are commonly used as consumer protection tools. This Article studies the rate, direction, and determinants of change in consumer standard-form contracting. We examine what changed between 2003 and 2010 in the terms of 264 mass-market consumer software license agreements. Thirty-nine percent of contracts materially changed at least one term, and some changed as many as fourteen terms. The average contract became more pro-seller as well as several hundred words longer. The increase in length is not due to the use of simpler language. Contract readability has been constant: The average contract is as readable as an article in a scientific journal. The variance of contract length has grown, as has the variance in overall pro-seller bias, resulting in reduced contract standardization over time. Firms that were younger, larger, or growing, as well as firms with in-house counsel, were more likely to change existing terms and to introduce new terms to take advantage of technological and market developments. Contracts appear to respond to litigation outcomes: Terms that were increasingly enforced by courts were more frequently used in contracts, and vice-versa. The results indicate that software license agreements are relatively dynamic and shaped by multiple factors over time. We discuss potential consumer protection implications as a result of the increased length and complexity of contracts over time. [ABSTRACT FROM AUTHOR]