The Limits of Voluntariness in Contract

—M.U.L.R- Robertson completed (2).
doc — The Limits of Voluntariness in Contract — printed 15/07/2005 at 12:38 PM — page 179 of 39
THE LIMITS OF VOLUNTARINESS IN CONTRACT

ANDREW ROBERTSON∗
[Contractual obligations are routinely characterised in the contract literature as voluntary or

voluntarily assumed. This article examines the major challenges to the voluntaristic conception of
contract. An obligation can be regarded as voluntary only if it is meaningfully understood, and the
decision to assume it is intentional and substantially unconstrained. Many contractual obligations
arise from standard form terms, which are commonly unread, frequently misunderstood, and
routinely unavoidable due to the lack of available alternatives. In some circumstances, the
obligations and curtailments of rights arising from unread standard form terms can be regarded as
voluntary, but in others they cannot. In exceptional cases, the objective approaches to formation and
interpretation result in parties becoming subject to obligations that they cannot be said to have
voluntarily assumed. The objective approach to the incorporation of terms, particularly unsigned
terms, leaves even greater scope for parties to become subject to obligations that cannot be said to
have been voluntarily assumed. Obligations routinely arise from the default rules of contract law,
which appear not to be well understood, even in the commercial context, and are often difficult to
avoid. Recent claims that these obligations inhere in the agreement itself have not been made out.
Contractual obligations and curtailments of rights are routinely fashioned by one contracting party
in the ignorance of the other, or by the state in the ignorance of both, and are often practically
unavoidable for one or both parties.]
CONTENTS
I Introduction............................................................................................................. 180
II The Voluntariness Claim and Its Meaning.............................................................. 182
A The Voluntariness Claim ............................................................................ 182
B Voluntary Actions and Voluntary Obligations............................................ 184
C Obligations and Curtailments of Rights..................................................... 186
III Challenges to the Voluntaristic Understanding of Contract.................................... 187
A Standard Form Contracts............................................................................ 187
1 The Use of Standard Forms ........................................................... 187
2 The Failure to Read ....................................................................... 188
3 Can Standard Form Terms Be Avoided?........................................ 193
4 The Legal Response ...................................................................... 196
5 Voluntariness and Standard Form Terms ....................................... 201
B The Courts and Contract Doctrine ............................................................. 202
1 The Objective Approaches to Formation, Incorporation and
Interpretation ................................................................................. 203
2 Gap-Filling and Default Rules....................................................... 207
3 Gaps, Default Rules, Consent and Voluntariness .......................... 211
IV Conclusion .............................................................................................................. 216
∗ LLB, LLM (Hons) (QUT), PhD (ANU); Associate Professor, Faculty of Law, The University of
Melbourne. A version of this article was presented at the Second Biennial Conference on the
Law of Obligations, The University of Melbourne, 15–16 July 2004. I would like to thank par-
ticipants in that conference for their responses. I am particularly grateful to Professor Anne
Orford and the anonymous referees for their detailed and very helpful comments on earlier
drafts.
179
M.U.L.R. — Robertson — printed 15/07/2005 at 12:38 PM — page 180 of 39
180 Melbourne University Law Review [Vol 29
I INTRODUCTION
We are repeatedly told in the contemporary contract literature that contractual
obligations are voluntary (‘the voluntariness claim’) and that contracting parties
are free to shape their contractual obligations according to their wishes (‘the
autonomy claim’). An understanding that embodies the voluntariness claim, the
autonomy claim and a sharp distinction between contract and tort represents one
of the most powerful conceptions of contractual obligation in the contemporary
contract literature. This contemporary understanding remains strongly influenced
by the classical view of contract adopted in the 19th century.1 The principal
difference between the classical understanding and what we might call the
neoclassical understanding is that the implications of the objective approach to
contract formation and interpretation are now well recognised.2 In recognition of
these objective approaches, the ‘convergence of the wills of the contracting
parties’3 is no longer said to be the source of contractual obligation. The idea that
contractual obligations emanate from the will of the parties has not been entirely
abandoned, however, because it remains implicit in the claim that contractual
obligations are voluntary.4 The ‘voluntary assumption of obligation’ has replaced
the ‘meeting of the minds’ as the perceived core of contract.
Whether the neoclassical conception of contract is currently the dominant
understanding of contract might be debated,5 but it certainly occupies a position
of prominence in the contemporary contract literature. The voluntariness and
autonomy claims are repeatedly made in leading judgments, scholarly writings,
practitioner treatises and student texts. Contract scholars are divided on their
willingness to acknowledge the defects in the neoclassical model. This division
is neatly captured in two almost contradictory statements made by Richard
Craswell. According to Craswell, ‘common belief holds that tort law imposes
duties without regard to a party’s consent, while contract law enforces only those
duties that a party has voluntarily assumed.’6 He goes on to say, however, that
‘[b]y now, it is well understood that the distinction between contract and tort is
not that simple, and that it does not line up neatly with any distinction between
1 On the classical conception of contract, see, eg, Morton Horwitz, The Transformation of
American Law, 1780–1860 (1977) ch 6; P S Atiyah, The Rise and Fall of Freedom of Contract
(1979) 405–8; Betty Mensch, ‘Freedom of Contract as Ideology’ (1981) 33 Stanford Law Review
753, 758–64; Hugh Collins, The Law of Contract (4th ed, 2003) 3–7.
2 Following the observation made by Jay Feinman in relation to ‘neoclassical contract law’, we
might say that the contemporary understanding of contract has not departed so far from the
classical understanding as to justify an entirely new name: Jay Feinman, ‘The Significance of
Contract Theory’ (1990) 58 University of Cincinnati Law Review 1283, 1285.
3 Horwitz, The Transformation of American Law, 1780–1860, above n 1, 160.
4 See Atiyah, The Rise and Fall of Freedom of Contract, above n 1, 406.
5 Hanoch Sheinman has suggested that ‘the new orthodoxy in contract theory [is that] there is no
such thing as a distinctly contractual obligation’: Hanoch Sheinman, ‘Contractual Liability and
Voluntary Undertakings’ (2000) 20 Oxford Journal of Legal Studies 205, 205. However, in
support of that claim, Sheinman cites only a single book, published 30 years ago: Grant Gilmore,
The Death of Contract (1974): at 205 fn 1.
6 Richard Craswell, ‘Against Fuller and Perdue’ (2000) 67 University of Chicago Law Review
99, 129.
2005] The Limits of Voluntariness in Contract 181
voluntary and involuntary obligations.’7 Craswell’s two statements accurately

describe the state of a field in which many judges and scholars understand that
there are defects in the voluntariness claim, yet still believe that contract law
‘enforces only those duties that a party has voluntarily assumed.’8
This article asks whether it is accurate to characterise contractual obligations
in general as voluntary. Although the autonomy claim and the sharp distinction
between contract and tort have been extensively criticised,9 the voluntariness
claim has not been the subject of sustained scrutiny. This article is concerned
with the idea that contractual obligations are voluntarily assumed, rather than the
related but distinct idea that contracting parties are free to make whatever
agreements they wish. Two examples illustrate the distinction as well as the
overlap between the two ideas. When the courts fill a contractual gap by impos-
ing a contractual obligation on one of the parties, this undermines the voluntari-
ness claim, but not the autonomy claim. Indeed, Timothy Endicott has argued
that gap-filling actually enhances contractual autonomy.10 The law of penalties,
on the other hand, challenges the autonomy claim, because it limits the capacity
of parties to shape their contractual obligations according to their wishes.11 Less
obviously, and less significantly, the law of penalties can also be seen as imping-
ing on the voluntariness claim, since it imposes a non-voluntary curtailment of
the aggrieved party’s rights in the event of breach.12
The first part of this article will deal with two important preliminary issues.
First, it will outline and provide prominent examples of the voluntariness claim.
Second, it will explore the nature of voluntariness, arguing that an obligation can
only be regarded as voluntary if the obligation is meaningfully understood and
the decision to adopt it is substantially unconstrained. The second part of the
article will consider the aspects of contractual behaviour and contract law that
undermine the claim that contractual obligations are generally voluntarily
assumed. That analysis will show that parties’ deficiencies of understanding and
choice are substantial and widespread, particularly in relation to rights and
obligations arising from standard forms and from the default rules of contract
7 Ibid 130 (citations omitted).

8 Ibid 129.
9 On the autonomy claim, see, eg, G H L Fridman, ‘Freedom of Contract’ (1967) 2 Ottawa Law
Review 1; Atiyah, The Rise and Fall of Freedom of Contract, above n 1, especially chs 21–2;
Roger Brownsword, Contract Law: Themes for the Twenty-First Century (2000) ch 2. On the
distinction between contract and tort, see P S Atiyah, ‘Contracts, Promises and the Law of Obli-
gations’ (1978) 94 Law Quarterly Review 193; Andrew Robertson, ‘On the Distinction between
Contract and Tort’ in Andrew Robertson (ed), The Law of Obligations: Connections and
Boundaries (2004) 87.
10 Timothy Endicott, ‘Objectivity, Subjectivity, and Incomplete Agreements’ in Jeremy Horder
(ed), Oxford Essays in Jurisprudence: Fourth Series (2000) 151, 170 argues that ‘[i]mposing
obligations that the parties did not agree to is not necessarily contrary to freedom of contract. In
fact, it is a necessary feature of a regime that promotes freedom of contract.’ Endicott goes on to
justify the second point by reference to the familiar idea that the courts facilitate the making of
contracts by providing default rules that save the parties from reaching agreement on all issues.
11 When a contract stipulates that a particular sum should be paid in the event of a breach, that
stipulation will be struck down as a penalty if the stipulated sum is extravagant and unconscion-
able, having regard to the likely loss and the relationship between the parties: Esanda Finance
Corporation Ltd v Plessnig (1989) 166 CLR 131.
12 See below Part II(C).
law. Since standard form terms and default rules are significant sources of
contractual obligation, the sweeping characterisation of contractual obligations
in general as voluntary paints a distorted and incomplete picture of contract.13
II T H E V O L U N TA R I N E S S C L A I M A N D I T S M E A N I N G
A The Voluntariness Claim

The cornerstone of the neoclassical conception of contract is the idea that
contractual obligations are voluntarily undertaken by contracting parties. Judges
and scholars routinely justify the legal recognition and enforcement of contrac-
tual obligations and curtailments of rights on the basis that they are voluntarily
adopted by the parties. In recent times, the House of Lords has held that contrac-
tual duties are ‘attributable to the will of the parties’,14 while the High Court of
Australia has insisted that ‘contractual obligations are voluntarily assumed’15 and
that ‘[i]t is of the essence of contract, regarded as a class of obligations, that there is
a voluntary assumption of a legally enforceable duty.’16 The authors of Chitty on
Contracts have maintained that ‘contractual obligations are voluntary’,17 and a
popular English textbook tells students that ‘[t]he distinguishing feature of
contractual obligations is that they are not imposed by the law but undertaken by
the contracting parties.’18
Scholars who acknowledge that there are defects in the classical conception of
contract still insist that at some fundamental level contractual obligations can be
regarded as voluntary commitments. Three examples of such thinking illustrate
the point. First, Brian Coote explains the need for a more inclusive theory of
contract than one based on will, agreement or promise,19 but goes on to identify
the voluntary assumption of obligation as the essence of contract.20 Second,
Andrew Burrows justifies doctrinal differences between remedies for breach of
contract and remedies for torts on the basis of ‘[t]he root distinction between
voluntary and purely imposed obligations’.21 He suggests that since contract is
‘based on a voluntary undertaking, the courts ought to tailor the remedy in
contract to what was voluntarily undertaken’.22 Broader remedial consequences
13 A related but different observation is made by Ian Macneil, ‘Book Review: Law in Society — An
Introduction to Freedom of Contract — Cases and Materials’ (1960) 46 Cornell Law Review
176, 177.
14 Henderson v Merrett Syndicates Ltd [1995] 2 AC 145, 194 (Lord Goff).
15 Astley v Austrust Ltd (1999) 197 CLR 1, 1 (Gleeson CJ, McHugh, Gummow, Hayne and
Callinan JJ).
16 Ermogenous v Greek Orthodox Community of SA Inc (2002) 209 CLR 95, 105 (Gaudron,
McHugh, Hayne and Callinan JJ), quoting Australian Woollen Mills Pty Ltd v Commonwealth
(1954) 92 CLR 424, 457 (Dixon CJ, Williams, Webb, Fullagar and Kitto JJ).
17 H G Beale (ed), Chitty on Contracts (28th ed, 1999) vol 1, 31. The proposition is later qualified:
at 34–5.
18 Sir John Smith, The Law of Contract (2nd ed, 1993) 2.
19 Brian Coote, ‘The Essence of Contract’ (Pt 2) (1989) 1 Journal of Contract Law 183, 190–1.
20 Ibid 194–5.
21 Andrew Burrows, Understanding the Law of Obligations: Essays on Contract, Tort and
Restitution (1998) 13.
22 Ibid.
in tort can be justified on the basis that, in tort, ‘the liability is purely imposed’.23
This discussion is cross-referenced to an earlier footnote in which Burrows
acknowledges the ‘wide ranging implication of terms’ and the objective founda-
tion of contractual obligations.24 Third, the ambivalence within the contract
literature is perhaps best expressed by US contracts scholar Charles Knapp, who
criticises Grant Gilmore, Macneil and others for
blurring the line between commitments which have been voluntarily assumed
and those that are socially imposed. One may concede that the line between the
two is wavering, illogical and marked by needlessly confusing overlaps, and
yet feel that there is a fundamental difference between the two types of obliga-
tions, a difference worth preserving in the structure of the law. While tort law
deals with conduct that flouts general notions of proper behaviour in society,
contract law addresses injuries occasioned by the breaking of commitments
voluntarily expressed.25
Two of the most prominent contract theorists in the US describe the assump-
tion of contractual obligation in terms that are closely akin to the voluntariness
claim. Charles Fried maintains that contract law is based on ‘the promise
principle’, which is ‘that principle by which persons may impose on themselves
obligations where none existed before.’26 For Fried, a contractual obligation is
‘essentially self-imposed.’27 In order to justify these claims, however, Fried
treats as ‘non-contractual’ much of what we regard as contract law, and much of
what the courts do in contract cases.28 Randy Barnett argues that the consent of
parties to be legally obligated is ‘at the heart of contract law’.29 The legal
enforcement of a contract ‘is morally justified because the promisor voluntarily
performed acts that conveyed her intention to create a legally enforceable
obligation’.30 As we will see, Barnett goes on to acknowledge that it is the
behaviour of the promisor that is crucial, rather than her consent or intentions,31
and accepts that the principles of contract law cannot be justified or explained
solely on the basis of voluntary commitment. Barnett’s consent theory of
contract is, therefore, a more complex theory of obligation than its name
suggests. Nevertheless, its labelling as a consent theory powerfully advances the
voluntariness claim. Barnett’s prominent ‘consent theory’ label and Fried’s
‘contract as promise’ banner may have a more powerful effect on our collective
perception of contract than the detail of the arguments made by Barnett and
23 Ibid.
24 Ibid 9–10 fn 29 (‘one is not looking at what the promisor has himself accepted an obligation to
do but at what a reasonable man regards the promisor as having accepted an obligation to do.’)
25 Charles Knapp, ‘Rescuing Reliance: The Perils of Promissory Estoppel’ (1998) 49 Hastings Law
Journal 1191, 1333 (citations omitted).
26 Charles Fried, Contract as Promise: A Theory of Contractual Obligation (1981) 1.
27 Ibid 2.
28 For example, the objective approach to contract formation, the doctrine of frustration and the
implication of terms.
29 Randy Barnett, ‘A Consent Theory of Contract’ (1986) 86 Columbia Law Review 269, 299
(citations omitted).
30 Ibid 300. See also at 318–19.
31 Ibid 305. See below nn 161–6 and accompanying text.
Fried, which acknowledge some of the significant limits of promise and consent
in the field of contract.32
B Voluntary Actions and Voluntary Obligations

Two different voluntariness claims are made in the contract literature. The first
claim is that the act of contracting is voluntary.33 The second is that contractual
obligations are voluntarily assumed.34 This article is concerned with the second
claim. The distinction between the two claims is crucial because it is the second
claim that is used to shape contract doctrine and to distinguish contract from
other fields of law. The law of contract, like criminal law and the law of tort, is
concerned with the legal consequences of voluntary behaviour. It is only in the
law of contract, however, that those legal consequences are regarded as volun-
tary or voluntarily assumed.
When can an obligation be regarded as voluntary? This question can be ap-
proached by beginning with a consideration of voluntary action, and then using
that conception of voluntariness to develop an understanding of a voluntary legal
obligation. Aristotle identified two essential conditions of voluntary action:
freedom from coercion, and an understanding of the circumstances and implica-
tions of the action.35 At the strictest level, an action is voluntary only if the
decision to engage in the action is entirely unconstrained and fully understood.36
Since breadth of choice and depth of understanding are matters of degree,
voluntariness can also be seen as a matter of degree.37 The very broadest
conception of voluntariness would accommodate any action motivated by a
deliberate decision, regardless of the conditions under which that decision is
32 Roland Barthes, Mythologies (Annette Lavers trans, 1993 ed) 130 suggests that myth operates at
the level of first impression. The myth has done its work even if we are later allowed to see
through it. The effect of the headline may ‘be stronger than the rational explanations which may
later belie it’: at 130.
33 See, eg, Agnew v Länsförsäkringsbolagens AB [2001] 1 AC 223, 264 (Lord Millett): ‘Contracts
are consensual transactions; they depend for their validity on the consent of both parties.’ On the
relationship between consent and voluntariness, see below n 73.
34 See above Part II(A).
35 Aristotle, Nicomachean Ethics (Sir David Ross trans, 1925 ed) Book III. Cf Robert Nozick,
Anarchy, State, and Utopia (1974) 262, who suggests that whether an action is voluntary de-
pends on what limits the actor’s alternatives. For Nozick, an action is voluntary no matter how
severely constrained it is by nature or by the actions of other people, provided those people are
acting within their rights. Nozick suggests that the actions of others impinge on voluntariness
only if those others had no right to act as they did. This normative conception of voluntariness
does not accord with the general understanding of the term expressed in the legal literature, nor
does it reflect the dictionary meaning. The general understanding is adopted here because the
central concern of this article is with the understanding of contract that is generated by the vol-
untariness claim. In any case, Nozick’s conception of voluntary action tells us only that the act
of contracting should be regarded as voluntary. It cannot readily be extended to develop an
understanding of voluntary obligations because it does not address the dimension of knowledge
or understanding. That dimension is crucial to a consideration of the question whether particular
conditions (such as legal obligations or curtailments of rights) have been voluntarily assumed.
36 A dictionary definition of voluntary is: ‘Of an action: performed or done of one’s own free will,
impulse, or choice; not constrained, prompted or suggested by another. Also more widely, left to
choice, not required or imposed, optional’: Lesley Brown (ed), The New Shorter Oxford English
Dictionary on Historical Principles (1993) 3600.
37 See Joel Feinberg, Social Philosophy (1973) 48. See also Ruth Faden and Tom Beauchamp, A
History and Theory of Informed Consent (1986) ch 7, who make the same point about autonomy.
made.38 It is well accepted that even highly coerced agreements involve some
exercise of will or choice, ‘however truncated or twisted the choice may be’.39 A
slave chooses to work rather than be punished.40 The victim of an armed hold-up
chooses to give up money rather than suffer the violent consequences of his or
her refusal.41
Some basic standards of choice and understanding must be met, however,
before we can regard a legal obligation as voluntarily assumed in the strong
sense used in contract texts. If contractual obligations are to be regarded as
voluntarily assumed, more is required than just an exercise of will or a deliberate
action. Aristotle argued that responsibility for the consequences of an action can
be attributed to the actor only if basic thresholds of choice and understanding are
met.42 In a similar vein, Anthony Kronman has said that
[i]n assessing the voluntariness of an agreement, it is not enough merely to de-
termine that the agreement was motivated by a deliberate decision of some sort;
we also want to know something about the circumstances under which it was
given.43
Ruth Faden and Tom Beauchamp have argued in the analogous context of
informed consent to medical treatment that intentionality, substantial understand-
ing and substantial freedom from control are necessary conditions of autono-
mous action.44 If obligations created by particular actions are to be regarded as
voluntary, then the following prerequisites must be fulfilled: the assumption of
obligation must be intentional; the decision to assume the obligation must be
substantially unconstrained; and the obligation itself must be substantially
understood.
It is important to reiterate that the voluntariness claim usually made in contract
texts is not that the act of contracting is voluntary, but that the legal conse-
quences of that action have been voluntarily assumed.45 The crucial question,
then, is not whether we can say that contracting is voluntary conduct, but
whether we can accurately say that, generally speaking, contracting parties
voluntarily undertake the obligations created by contract and voluntarily give up
the rights that contracts curtail or take away.46 This conclusion does not just
38 See, eg, Michael Philips, ‘Are Coerced Agreements Involuntary?’ (1984) 3 Law and Philosophy
133, 133–4; Anthony Kronman, ‘Contract Law and Distributive Justice’ (1980) 89 Yale Law
Journal 472, 477–8.
39 Ian Macneil, ‘The Many Futures of Contracts’ (1974) 47 Southern California Law Review 691,
705. See also Collins, The Law of Contract, above n 1, 138.
40 Robert Hale, ‘Bargaining, Duress, and Economic Liberty’ (1943) 43 Columbia Law Review 603,
606.
41 Macneil, ‘The Many Futures of Contracts’, above n 39, 703–4.
42 Aristotle, above n 35, 1 referred to actions for which ‘praise and blame are bestowed’.
43 Kronman, above n 38, 478. See also Joan McGregor, ‘Philips on Coerced Agreements’ (1988) 7
Law and Philosophy 225, 227–8.
44 Faden and Beauchamp, above n 37, ch 7.
45 See above nn 15–24 and accompanying text. When used to characterise obligations, the word
‘voluntary’ is used in this sense: ‘Assumed or adopted voluntarily or by free choice; freely
chosen or undertaken’: J A Simpson and E S C Weiner (eds), Oxford English Dictionary (2nd ed,
1989) vol 19, 754.
46 See below n 51 and accompanying text.
depend on contracting parties generally behaving intentionally and being

substantially free from external control. Most importantly, it requires that
contracting parties substantially understand the nature of the obligations they are
undertaking and the rights they are giving up. If we are asking whether a
particular obligation has been voluntarily assumed then the dimension of
information becomes crucial, as it does in determining whether a particular risk
was voluntarily assumed. Joel Feinberg has observed that ‘[o]ne assumes a risk
in a fully voluntary way when one shoulders it while informed of all relevant
facts and contingencies, and in the absence of coercive pressure or compul-
sion.’47 We are not concerned here with the question whether contractual
obligations are fully voluntary, because insisting on that standard would ‘stack
the deck of the argument’ against voluntariness.48 Instead, the relevant question
is whether contractual obligations are sufficiently voluntary that the concept of
voluntariness carries the weight it is asked to bear in the neoclassical literature.
The issue, therefore, is whether contractual obligations can be regarded as
substantially voluntary.49 If we accept that the making of a contract generally
involves intentional conduct,50 the crucial issues in determining whether
contractual obligations are substantially voluntary are whether a contracting
party substantially understands the nature of the obligations and curtailments of
rights created by the contract, and whether he or she is able to exercise a
substantially unconstrained choice as to whether to assume them.
C Obligations and Curtailments of Rights

The consideration of contractual obligations in this article is not limited to
contractual stipulations requiring the performance of particular positive actions.
Many contract terms, and indeed contract doctrines, do not require the parties to
take particular actions, but operate instead to limit or curtail their rights. Such
rights may be curtailed by a limitation of liability clause, a jurisdiction clause, a
governing law clause, an arbitration clause, a merger or entire agreement clause,
or a termination clause. Curtailments of rights such as these are, of course,
extremely significant from a practical point of view. In assessing the role of
voluntariness in contract, it is crucial to ask whether the adjustments of rights
under these ‘nonperformance terms’51 can be regarded as voluntarily assumed.
One of the most important lessons of the 20th century contract literature was that
the unread, non-negotiable standard form is the dominant form of written
contracting. Contract scholarship must therefore take the standard form, rather
47 Feinberg, above n 37, 48 (emphasis added).

48 Faden and Beauchamp, above n 37, 240, observe that ‘[t]o chain informed consent [to medical
treatment] to fully or completely autonomous decisionmaking stacks the deck of the argument
and strips informed consent of any meaningful place in the practical world’ (emphasis in origi-
nal).
49 The concept of ‘substantial voluntariness’ is analogous to the concept of ‘substantial autonomy’
adopted and explained by Faden and Beauchamp: ibid ch 7.
50 Leaving aside the exceptional cases in which a contract may be made inadvertently: see
Robertson, above n 9, 92–3, 95.
51 Melvin Eisenberg, ‘The Limits of Cognition and the Limits of Contract’ (1995) 47 Stanford Law
Review 211, 240.
than the negotiated transaction, as its central focus. Whether the legal implica-
tions of a limitation of liability clause in an unread standard form contract can be
regarded as voluntarily assumed should perhaps be regarded as the exemplary
issue in relation to voluntariness in contract. From this perspective, contracting is
about questions of consent (to the curtailment of rights) as much as it is about the
practice of promising (to perform actions). In considering whether the voluntari-
ness claim made in the contract literature stands up to close scrutiny, proper
account must be taken of non-performance terms and curtailments of rights as
well as obligations requiring positive actions.
III C H A L L E N G E S T O T H E V O L U N TA R I S T I C U N D E R S TA N D I N G O F
CONTRACT
In order to understand the limits of voluntariness, it is necessary to scrutinise
the two least voluntary sources of contractual obligations: the role played by
standard forms, and the role played by the courts in shaping the rights and
obligations of the parties.
A Standard Form Contracts

The first question is the extent to which standard form contracting undermines
the voluntariness claim. This depends on the extent to which standard forms are
used and whether the contractual obligations and curtailments of rights arising
from standard forms can properly be seen as voluntary. A number of issues need
to be considered. First, how widespread is the use of standard forms in contract-
ing? Second, how often are standard forms read by the non-drafting party? Third,
can voluntary obligations arise from unread terms? Fourth, to what extent is it
possible to avoid known, undesirable terms of standard form contracts? Fifth,
how far does the law go towards ensuring that that the obligations that arise from
standard form terms are voluntary? In particular, to what extent does the law
ensure that parties are not bound by terms that they have not read, terms whose
implications they could not understand, or terms that are difficult or impossible
to avoid in practice?
1 The Use of Standard Forms
In 1971, W David Slawson estimated that 99 per cent of all contracts were
made on terms presented by one party to the other in a standard form.52 This
estimate has since been widely accepted as an accurate assessment of the
percentage of written contracts made on standard form terms.53 While it would
be difficult for any researcher to generate meaningful data comparing the use of
52 W David Slawson, ‘Standard Form Contracts and Democratic Control of Lawmaking Power’
(1971) 84 Harvard Law Review 529, 529.
53 See, eg, Robert Hillman and Jeffrey Rachlinski, ‘Standard-Form Contracting in the Electronic
Age’ (2002) 77 New York University Law Review 429, 431; John Burke, ‘Contract as Commod-
ity: A Nonfiction Approach’ (2000) 24 Seton Hall Legislative Journal 285, 290; Russell Korob-
kin, ‘Bounded Rationality, Standard Form Contracts, and Unconscionability’ (2003) 70 Univer-
sity of Chicago Law Review 1203, 1203; William Woodward Jr, ‘Neoformalism in a Real World
of Forms’ [2001] Wisconsin Law Review 971, 985 fn 62.
standard forms with the use of fully negotiated contracts,54 personal and profes-
sional experience leads scholars who write on this topic to accept that standard
forms dominate all forms of contracting, other than agreements that are wholly
oral (including routine retail purchases), and non-routine commercial contracts.55
2 The Failure to Read
(a) The Empirical Evidence
It is well accepted that standard form contracts are rarely read by the
non-drafting party, and rarely understood on the odd occasions when they are
read.56 Some say they are not meant to be read.57 The failure of consumers to
read standard form contracts has been recognised by the courts in the US,58 the
United Kingdom,59 Canada60 and Australia.61 Empirical evidence suggests that
even businesspeople commonly fail to read standard forms. In his study of
contractual practices amongst Wisconsin manufacturers, Stewart Macaulay
found that ‘only occasionally would [purchasing agents] bother to read the fine
print on the back of suppliers’ forms.’62 John Murray reported in 1982 that he
had ‘conducted seminars involving over 5000 purchasing agents and ha[d] never
54 Harold Shepherd, ‘Contracts in a Prosperity Year’ (1954) 6 Stanford Law Review 208 studied the
very different question of the types of contract that were the subject of appellate litigation in the
US in 1951. Approximately 23 per cent were oral, 25 per cent were in printed form, 37 per cent
were negotiated, 6 per cent constituted other written contracts, 3 per cent were implied, and 6
per cent were unclear: at 212.
55 Atiyah, The Rise and Fall of Freedom of Contract, above n 1, 734 suggests that fully negotiated
contracts are ‘the exception in life as a whole, though they may not be exceptional in the Cham-
bers of a barrister.’ Although Friederich Kessler, ‘Contracts of Adhesion — Some Thoughts
about Freedom of Contract’ (1943) 43 Columbia Law Review 629, 632 famously observed in
1943 that standard form contracts ‘are typically used by enterprises with strong bargaining
power’, it is now well accepted that they are very commonly used by enterprises without market
power: see, eg, Michael Trebilcock, ‘An Economic Approach to the Doctrine of Unconscionabil-
ity’ in Barry Reiter and John Swan (eds), Studies in Contract Law (1980) 379, 398–404; Hugh
Collins, Regulating Contracts (1999) 230; Hugh Beale, ‘Legislative Control of Fairness: The
Directive on Unfair Terms in Consumer Contracts’ in Jack Beatson and Daniel Friedmann (eds),
Good Faith and Fault in Contract Law (1995) 231, 232.
56 Todd Rakoff, ‘Contracts of Adhesion: An Essay in Reconstruction’ (1983) 96 Harvard Law
Review 1173, 1179. See also Hillman and Rachlinski, above n 53, 432–3, 448; Michael Meyer-
son, ‘The Reunification of Contract Law: The Objective Theory of Consumer Form Contracts’
(1993) 47 University of Miami Law Review 1263, 1269–70; Randy Barnett, ‘Consenting to Form
Contracts’ (2002) 71 Fordham Law Review 627, 628–9.
57 McCutcheon v David MacBrayne Ltd [1964] 1 All ER 430, 436 (Lord Devlin); Ian Macneil,
‘Bureaucracy and Contracts of Adhesion’ (1984) 22 Osgoode Hall Law Journal 5, 5. See also
Arthur Leff, who states that: ‘The form contract is designed not to be read or pondered; if it is or
has to be it loses much of its utility’: Arthur Leff, ‘Unconscionability and the Code — The
Emperor’s New Clause’ (1967) 115 University of Pennsylvania Law Review 485, 504 (emphasis
in original).
58 See, eg, Davis v MLG Corporation, 712 P 2d 985, 992 (Colo, 1986) (Neighbors J); Meyerson,
‘The Reunification of Contract Law’, above n 56, 1269 fnn 28–9.
59 See, eg, Suisse Atlantique Société d’Armement Maritime SA v NV Rotterdamsche Kolen Centrale
[1967] 1 AC 361, 406 (Lord Reid); Thornton v Shoe Lane Parking Ltd [1971] 2 QB 163, 169
(Lord Denning).
60 See, eg, Tilden Rent-A-Car Company v Clendenning (1978) 83 DLR (3d) 400, 408 (Dubin JA).
61 See, eg, MacRobertson Miller Airline Services v Commissioner of State Taxation (WA) (1975)
133 CLR 125, 137 (Stephen J). See also Baltic Shipping Co v Dillon; The ‘Mikhail Lermontov’
(1991) 22 NSWLR 1, 25 (Kirby P).
62 Stewart Macaulay, ‘Non-Contractual Relations in Business: A Preliminary Study’ (1963) 28
American Sociological Review 55, 59.
discovered one who read or understood printed terms. Moreover not one read or
understood the terms on his own purchase order form.’63 Daniel Keating
interviewed 13 buyers and sellers from various industries and found that
‘[v]irtually none [of them] actually read the other party’s form beyond verifying
the key terms of the deal: quantity, type, price, and delivery terms.’64 In
Keating’s later study of large manufacturing companies involved in buying and
selling, most respondents believed that ‘their own company’s employees never
or rarely read what was on the other side’s form beyond the dickered terms of the
deal.’65 About half of his respondents believed that parties on the other side of
transactions were reading the forms sent to them. As Keating observes, however,
the raising of an objection to a particular term is
[p]robably the surest indication that the other side is reading your company’s
form … [T]he consensus on this question was that it rarely happens, and when
it does, it is much more likely to be with a large-dollar purchaser or a
large-dollar vendor.66
While the courts must be right to assume that consumers do not generally read
terms in routine transactions such as passenger transportation or car rental
agreements, there is empirical evidence that some types of standard form
contracts are more commonly read. In their study of sale and purchase contracts
made by engineering manufacturers, Hugh Beale and Tony Dugdale found that
printed terms were sometimes read.67 While in some cases the ‘back of order’
terms were not looked at, in others, buyers and sellers not only read each other’s
forms, but identified and resolved major differences between them.68 Of the 100
residential tenants in Ann Arbor, Michigan, surveyed by Warren Mueller, about
half claimed to have ‘read carefully all paragraphs of any leases they had
signed.’69 Mueller also cites a study by the Ontario Law Reform Commission, in
which 92 per cent of respondents claimed to have read their leases before signing
63 John Murray Jr, ‘The Standardized Agreement Phenomena in the Restatement (Second) of
Contracts’ (1982) 67 Cornell Law Review 735, 778–9 fn 207. Murray also said that ‘when the
purchasing agents were asked to explain a printed term from their own purchase order forms,
they could not do so’: John Murray Jr, ‘The Chaos of the “Battle of the Forms”: Solutions’
(1986) 39 Vanderbilt Law Review 1307, 1317 fn 47.
64 Daniel Keating, ‘Measuring Sales Law against Sales Practice: A Reality Check’ (1997) 17
Journal of Law and Commerce 99, 106.
65 Daniel Keating, ‘Exploring the Battle of the Forms in Action’ (2000) 98 Michigan Law Review
2678, 2704. Keating interviewed in-house counsel and businesspeople handling sales contracts
at 25 companies, 10 of which contracted as both buyer and seller, 11 principally as buyer and 4
principally as seller: at 2693.
66 Ibid 2703–4 (citations omitted).
67 Hugh Beale and Tony Dugdale, ‘Contracts between Businessmen: Planning and the Use of
Contractual Remedies’ (1975) 2 British Journal of Law and Society 45, 50.
68 Ibid. Beale and Dugdale observe that ‘[u]sually these were the same items that would be the
subject of detailed discussion if a contract were specifically negotiated … for instance payment
terms or warranty periods, and whether the price was fixed or open’: at 50.
69 Warren Mueller, ‘Residential Tenants and Their Leases: An Empirical Study’ (1970) 69
Michigan Law Review 247, 274. Mueller notes that his sample was unusually well-educated: 70
per cent were either professionals or students and 60 per cent had either a graduate degree or
some graduate school education: at 254–5.
them.70 Although most respondents in both studies claimed to understand the

terms of their leases, both studies indicated that the majority of tenants did not in
fact understand the basic covenants of their leases.71
One could hypothesise as to why residential leases might be read more often
than other types of contracts. The transaction is likely to be financially signifi-
cant and of long duration. Security of tenure in one’s home is likely to be of
fundamental importance to the individual. The risk of breach and the prospect of
enforcement of the terms of a residential lease may be less remote than for other
contracts. Residential tenants may also be given an opportunity to read leases
before signing and not pressured into signing quickly. In these respects a
residential lease differs from the paradigmatic unread consumer agreement: the
car rental contract signed by a busy traveller at the airport while other customers,
‘also in a hurry, are waiting in line’.72
(b) Voluntary Obligations Arising from Unread Terms
Might obligations and curtailments of rights arising from standard form terms
be regarded as voluntary even if the form has not been read? Barnett has argued
that, because they are freely accepted, the obligations arising from unread
standard form terms should be viewed as voluntary.73 A person who signs a
standard form contract signals her consent to be bound by the terms set out in the
contract.74 Barnett suggests that it does not matter whether the signing party has
read the terms or not: she is agreeing to be bound by them, whatever they may
be. The same applies when a person clicks the ‘I agree’ dialogue box on a
computer screen without having read the terms set out in a scroll box. ‘Whether
or not it is a fiction to say someone is making the promise in the scroll box, it is
no fiction to say that by clicking “I agree” a person is consensually committing
to these (unread) promises.’75 For Barnett, the law of contract facilitates the
assumption of risk. A person who promises to accept an unknown obligation or
curtailment of rights is simply accepting a risk that the promise may be regretted
when the content becomes known.76 Barnett convincingly explains that, in some
situations, the non-drafting party makes a voluntary choice not to inform himself
or herself about the obligations he or she is undertaking.
70 Ontario Law Reform Commission, Interim Report on Landlord and Tenant Law Applicable to
Residential Tenancies (1968), as cited in ibid 250–1.
71 Mueller, above n 69, 251, 274.
72 Hillman and Rachlinski, above n 53, 448. See also Eisenberg, ‘The Limits of Cognition and the
Limits of Contract’, above n 51, 242; Meyerson, ‘The Reunification of Contract Law’,
above n 56, 1269; Burke, above n 53, 286; Srivastava v TD Waterhouse (Unreported, Ontario
Superior Court of Justice, Hoilett J, 16 July 2003) [47]: ‘Those contracts may well be referred to
as “contracts-on-the-run”; they are seldom if ever read and few people, if any, expects [sic] them
to be read.’
73 Barnett, ‘Consenting to Form Contracts’, above n 56. Barnett’s argument is that the non-drafting
party ‘consents to’ or ‘consensually commits to’ standard form terms. Since the dictionary defi-
nition of ‘consent’, when used in relation to terms, is a ‘voluntary agreement to or acquiescence
in’ those terms (Brown, above n 36, 484), Barnett can be seen as defending the voluntariness
claim in relation to standard form terms.
74 Barnett, ‘Consenting to Form Contracts’, above n 56.
75 Ibid 636.
76 Ibid.
There is, however, a problem with Barnett’s theory that limits its scope of
application. In some situations, the non-drafting party’s decision not to inform
himself or herself about the terms of a standard form contract may not itself be
voluntary. It must be recalled that we are not concerned here with the question
whether the act of accepting the unread terms is a voluntary action. Rather, we
are concerned with the question whether the obligations created by the unread
standard form can be regarded as voluntarily assumed. Knowledge of the
obligation to be assumed is a prerequisite of the voluntary assumption of
obligation. Barnett’s analysis suggests that a contracting party might voluntarily
dispense with the knowledge requirement. The question, then, is whether a party
signing an unread standard form has made a voluntary decision to assume a set
of unknown obligations. That depends on whether the party’s decision not to
inform himself or herself of the obligations to be undertaken can itself be
regarded as voluntary.
The non-drafting party’s decision not to read can only be regarded as voluntary
if he or she exercises a substantially unconstrained choice not to read the terms
and have a basic understanding of what the terms might deal with.77 As Kim
Lane Scheppele has observed, the principal difficulty is that while information as
to alternatives and consequences is ‘a precondition of choice’, it is also itself ‘an
object of choice’.78 A contracting party’s decision not to inform himself or
herself about the terms of a contract may be regarded as voluntary in some
circumstances but not in others. Whether the obligations created by an unread
standard form may be regarded as voluntary depends on why the non-drafting
party has failed to read the contract terms.
There is now a substantial body of literature exploring the reasons why indi-
vidual and business consumers fail to read standard form contracts.79 The various
reasons represent a spectrum running from a substantially voluntary decision not
to read (well-informed and relatively unconstrained) to a substantially
non-voluntary decision not to read (poorly informed or significantly con-
strained). At the highly voluntary end of the spectrum is the decision not to read
that is made for reasons of efficiency. Psychological evidence indicates that
individuals will take shortcuts rather than process all available information in
relation to a transaction.80 Reading and understanding standard forms is costly,
and that cost may not be justified by the benefits yielded.81 We might see these
motivations as substantially voluntary. The decision not to read may, however,
also be motivated by misplaced optimism. Standard forms mostly contain
‘nonperformance terms that … concern low-probability risks.’82 Studies have
77 Michael Trebilcock, The Limits of Freedom of Contract (1993) 103 has observed that ‘it is
difficult to conceive of a choice as autonomous without basic information on its implications’.
78 Kim Lane Scheppele, Legal Secrets: Equality and Efficiency in the Common Law (1988) 25.
79 The discussion below draws on Hillman and Rachlinski, above n 53, 445–54, who survey the
literature and explain the ways in which rational, social and cognitive factors conspire against
the reading of standard forms.
80 Ibid 450–1. See also Eisenberg, ‘The Limits of Cognition and the Limits of Contract’,
above n 51, 214–16; Korobkin, above n 53, 1226–9.
81 Michael Meyerson, ‘The Efficient Consumer Form Contract: Law and Economics Meets the
Real World’ (1990) 24 Georgia Law Review 583, 597–600.
82 Eisenberg, ‘The Limits of Cognition and the Limits of Contract’, above n 51, 240.
repeatedly shown that ‘people are unrealistically optimistic.’83 The human

tendency to underestimate and ignore low-probability adverse risks84 makes
contracting parties unlikely to be concerned about the remote contingencies dealt
with in most standard form terms.85 The non-drafting party may believe that the
terms reflect industry standards,86 that the drafting party will act fairly in any
case to protect its reputation,87 or that the courts will not enforce unfair terms.88
More significantly, the non-drafting party may be unable to read or understand
the implications of the terms. Terms expressed in technical legal language will
often be difficult for a consumer or businessperson to read, and the implications
of the terms will often be difficult for a non-lawyer to comprehend.89
The decision not to read may also result from social factors, which do not sit
entirely comfortably with Barnett’s idea that the failure to read can be regarded
as a voluntary decision to assume an unknown risk. Reading standard form terms
can be confrontational and indicates that the non-drafting party does not trust the
drafting party or the drafting party’s representative.90 There is evidence that
people generally seek to avoid confrontation and willingly do favours for
others.91 These social factors may be deliberately exploited by salespeople to
discourage reading.92 Robert Hillman and Jeffrey Rachlinski conclude that
salespeople can draw on ‘a host of social conventions and influences that lead
people into quiet compliance when signing standard-form contracts.’93
In light of the above, can the legal obligations that arise from signing an un-
read standard form always be regarded as having been voluntarily assumed?
There are clearly some situations in which we might regard the unknown
obligations created by unread standard form terms as substantially voluntary. We
might draw this conclusion where the non-drafting party correctly believes that
the terms deal with low-probability risks, has a basic understanding of what such
risks might be, and is content to accept whatever such risks are allocated to him
83 Ibid 216–18 (citations omitted). See also Melvin Eisenberg, ‘The Theory of Contracts’ in Peter
Benson (ed), The Theory of Contract Law (2001) 206, 251.
84 See Eisenberg, ‘The Limits of Cognition and the Limits of Contract’, above n 51, 223–5;
Eisenberg, ‘The Theory of Contracts’, above n 83, 253.
85 Hillman and Rachlinski, above n 53, 453–4; Robert Hillman, ‘The Limits of Behavioural
Decision Theory in Legal Analysis: The Case of Liquidated Damages’ (2000) 85 Cornell Law
Review 717, 723–4; Korobkin, above n 53, 1233.
86 Daniel Ostas, ‘Postmodern Economic Analysis of Law: Extending the Pragmatic Visions of
Richard A Posner’ (1998) 36 American Business Law Journal 193, 229.
87 On firms’ repair and return practices being more generous than their written terms require, see
William Whitford, ‘Strict Products Liability and the Automobile Industry: Much Ado about
Nothing’ [1968] Wisconsin Law Review 83, 161–2. See also Rakoff, above n 56, 1221, 1228;
Robert Hillman, ‘Rolling Contracts’ (2002) 71 Fordham Law Review 743, 746.
88 Hillman, ‘Rolling Contracts’, above n 87, 747; Hillman and Rachlinski, above n 53, 447; Ostas,
above n 86, 229.
89 See Alan White and Cathy Lesser Mansfield, ‘Literacy and Contract’ (2002) 13 Stanford Law
and Policy Review 233; Eisenberg, ‘The Limits of Cognition and the Limits of Contract’,
above n 51, 241; Meyerson, ‘The Reunification of Contract Law’, above n 56, 1270.
90 Hillman and Rachlinski, above n 53, 448.
91 Ibid 449–50.
92 For example, the form may be presented after the customer has been made to feel that he or she
has won concessions: ibid 449.
93 Ibid 450 (citations omitted).
or her. In this situation, the non-drafting party does not have knowledge of the
specific obligations they are accepting, but substantially understands the nature
of the risk he or she is assuming. In other circumstances, the decision not to read
may be regarded as substantially non-voluntary. We might draw this conclusion
where the non-drafting party decides not to read because of a misunderstanding
as to the likely subject matter of the terms or because of an inability to read or
comprehend the implications of the terms.94
3 Can Standard Form Terms Be Avoided?
The next question is whether a contracting party who reads standard form
terms can avoid those obligations and curtailments of rights that he or she finds
unpalatable. Whether a particular term can be avoided by an individual or
business consumer who is aware of it depends on four questions: first, whether
the terms are negotiable; second, whether substitute goods or services are
available on different terms; third, whether it is feasible for the individual or
business consumer to investigate differences between relevant terms; and fourth,
whether the individual or business consumer can do without the goods or
services altogether.95
It is well accepted that standard form terms are typically not negotiable in
consumer contracts and are often not negotiable in commercial contracts.96
Standard forms are used in order to reduce transaction costs97 and standardise
transactions.98 Negotiation of terms would undermine the first of these goals and
any resulting variation would undermine the second.99 In any case, an attempt to
negotiate will be futile if the consumer is dealing with a salesperson who is not
authorised to accept a variation, and it is well accepted that this is typically the
94 The legal response to standard form contracts fails to distinguish between these two situations.
As a result, contract law does not ensure that the decision not to read a standard form contract is
a voluntary decision to accept the risk of unknown obligations and curtailments of rights.
95 The second and fourth questions come from John Murray Jr, ‘Unconscionability: Unconscion-
ability’ (1969) 31 University of Pittsburgh Law Review 1, 31–3.
96 See, eg, Hillman and Rachlinski, above n 53, 435–6; E Allan Farnsworth, Farnsworth on
Contracts (1990) vol 1, 480; Kessler, above n 55, 632; Suisse Atlantique Société d’Armement
Maritime SA v NV Rotterdamsche Kolen Centrale [1967] 1 AC 361, 406 (Lord Reid). In a com-
mercial context, the limited empirical evidence that is available on this point tells us only what
can be learned from a year or two in legal practice, namely that the terms of commercial con-
tracts are sometimes negotiable, depending on factors such as dollar value and level of risk:
Keating, ‘Exploring the Battle of the Forms in Action’, above n 65, 2697–8; Beale and Dugdale,
above n 67, 48–51.
97 Hillman and Rachlinski, above n 53, 439–40; Kessler, above n 55, 631–2; Steven Salbu,
‘Evolving Contract as a Device for Flexible Coordination and Control’ (1997) 34 American
Business Law Journal 329, 375–9 (also explaining reduction of agency costs); Alan Schwartz,
‘A Reexamination of Nonsubstantive Unconscionability’ (1977) 63 Virginia Law Review 1053,
1064–71; Slawson, ‘Standard Form Contracts and Democratic Control of Lawmaking Power’,
above n 52, 531.
98 Restatement (Second) of Contracts § 211 cmt b (1981): ‘One of the purposes of standardization
is to eliminate bargaining over details of individual transactions, and that purpose would not be
served if a substantial number of customers retained counsel and reviewed the standard terms.’
See also Slawson, ‘Standard Form Contracts and Democratic Control of Lawmaking Power’,
above n 52, 552; Rakoff, above n 56, 1221–4; Barnett, ‘Consenting to Form Contracts’,
above n 56, 630–1.
99 Meyerson, ‘The Reunification of Contract Law’, above n 56, 1270.
case.100 It is now well-recognised that the question whether standard form terms
are negotiable is not really to the point. In most situations it does not make
economic sense to negotiate standard form terms. The issue in routine transac-
tions is not whether the terms are negotiable, nor whether the non-drafting party
has power to bargain, but whether the non-drafting party has the power to avoid
undesirable terms by walking away from the transaction.
It is well-recognised that there is considerable uniformity of terms between
competing suppliers of particular goods and services.101 This may be because the
commonly used terms represent an ideal allocation of risks, because smaller
competitors have copied the terms offered by larger firms or because competition
as to terms has forced all suppliers to adopt generous terms.102 However, it may
be because suppliers tend to compete on price, rather than terms, and because of
the failure of consumers to read the terms, and the irregularity with which they
are enforced, having the result that no competition as to terms ever develops.103
Indeed, strong price competition may even exacerbate a standardisation of terms
that shifts risk to the non-drafting party.104 As Slawson has pointed out,
‘[s]tandardization reduces the number of choices and so makes more likely the
possibility that in any particular instance there will be only one that is reason-
able.’105
Even if the providers of a particular product or service do offer different terms,
cost and cognitive factors make it extremely unlikely that an individual or
business consumer will identify and compare the available alternatives.106
Psychological evidence suggests that people ‘seldom collect all relevant data
before making decisions.’107 It may be considered irrational to review and
compare available terms, particularly in relation to a one-off transaction where
the terms in question deal mostly with low-probability risks.108 A non-drafting
100 Restatement (Second) of Contracts § 211 cmt b (1981): ‘Employees regularly using a form often
have only a limited understanding of its terms and limited authority to vary them.’ Meyerson,
‘The Reunification of Contract Law’, above n 56, 1269–70, cites A & M Produce Co v FMC
Corp, 186 Cal Rptr 125 fn 13 (Ct App, 1982) where an employee gave evidence that he was not
empowered to negotiate over standard form terms, and Davis v MLG Corporation, 712 P 2d 985,
992 (Colo, 1986), where a car rental agent gave evidence that the standard form agreement was
offered on a take it or leave it basis and that she had never seen a customer read the terms on the
back of the rental agreement.
101 See Hillman, ‘Rolling Contracts’, above n 87, 747–8; Karl Llewellyn, The Common Law
Tradition: Deciding Appeals (1960) 362; Karl Llewellyn, ‘What Price Contract? — An Essay in
Perspective’ (1931) 40 Yale Law Journal 704, 734; Rakoff, above n 56, 1227; Hugh Beale,
‘Inequality of Bargaining Power’ (1986) 6 Oxford Journal of Legal Studies 123, 133.
103 See Korobkin, above n 53, 1206.
104 Rakoff, above n 56, 1227; Beale, ‘Inequality of Bargaining Power’, above n 101, 131; Korobkin,
above n 53, 1206.
105 Slawson, ‘Standard Form Contracts and Democratic Control of Lawmaking Power’, above n 52,
550.
106 See Arthur Leff, ‘Unconscionability and the Crowd — Consumers and the Common Law
Tradition’ (1970) 31 University of Pittsburgh Law Review 349, 351. For a specific example, see
Ting v AT & T, 182 F Supp 2d 902, 914, 929 (ND Cal, 2002) on the commonality of dispute
resolution terms amongst the major long-distance telecommunications carriers servicing Cali-
fornia, and the difficulties a consumer would face in identifying the carrier that did offer more
favourable terms.
107 Eisenberg, ‘The Theory of Contracts’, above n 83, 252.
108 Eisenberg, ‘The Limits of Cognition and the Limits of Contract’, above n 51, 243–4.
party must understand the legal implications of particular terms before he or she
will be motivated to shop for terms and able to weigh the respective benefits of
the different terms available, and in most cases the costs of search and compari-
son will be prohibitive.109 For the business consumer engaged in a large number
of purchases from different suppliers, it is not economical to have employees
read standard forms or to seek legal advice on their implications.110 It is said that
‘imperfections in human processing ability increase as decisions become more
complex and involve more permutations.’111 For individual or business consum-
ers, it would be extremely difficult to weigh the respective benefits of price and
terms packages offered by different providers of a particular good or service.112
If the products on offer differ, then the weighing of benefits becomes even more
complex as the product dimension is introduced to the equation.
The final question is whether, in a given situation, it is possible to avoid obli-
gations arising from standard form terms by going without the relevant goods or
services altogether. The answer depends, of course, on the particular context and
the nature of the good or service in question. No doubt in some situations
individuals and business organisations contract for goods and services that they
could do without altogether, while in others the latitude of choice is narrower.
However, Robert Hale taught us long ago that exchange is essential in a market
economy. The idea that individuals ‘can choose not to participate in market
transactions’113 has long been recognised as a misconception. The free market
economic system requires all individuals to contract in order to live.114 Both
individuals and business organisations are dependent on many products and
services that are available only on standard terms.115 This product dependence
109 Ibid. See also Alan Schwartz and Louis Wilde, ‘Intervening in Markets on the Basis of Imperfect
Information: A Legal and Economic Analysis’ (1979) 127 University of Pennsylvania Law Re-
view 630, 660–1.
110 See Richard Craswell, ‘The Sound of One Form Battling: Comments on Daniel Keating’s
“Exploring the Battle of Forms in Action”’ (2000) 98 Michigan Law Review 2727, 2730–1;
Victor Goldberg, ‘The “Battle of the Forms”: Fairness, Efficiency, and the Best-Shot Rule’
(1997) 76 Oregon Law Review 155, 157, 164.
111 Eisenberg, ‘The Theory of Contracts’, above n 83, 250 (citations omitted).
112 Korobkin, above n 53, 1225–34; Melvin Eisenberg, ‘Text Anxiety’ (1986) 59 Southern
California Law Review 305; Schwartz and Wilde, above n 109, 659–61; Rakoff, above n 56,
1226.
113 Larry Bates, ‘Administrative Regulation of Terms in Form Contracts: A Comparative Analysis of
Consumer Protection’ (2002) 16 Emory International Law Review 1, 1. Bates argues that
‘[a]lthough consumers have a choice in the sense that they can choose not to participate in mar-
ket transactions, once consumers decide to participate, the choices that remain available do not
concern the rights and responsibilities of each party to the transaction’: at 1.
114 Robert Hale, ‘Coercion and Distribution in a Supposedly Non-Coercive State’ (1923) 38
Political Science Quarterly 470; Hale, ‘Bargaining, Duress, and Economic Liberty’, above n 40
(on the significance of Hale’s work, see Morton Horwitz, The Transformation of American Law,
1870–1960: The Crisis of Legal Orthodoxy (1992) 195–8); Macneil, ‘The Many Futures of
Contracts’, above n 39; Macneil, ‘Bureaucracy and Contracts of Adhesion’, above n 57, 19–20;
Slawson, ‘Standard Form Contracts and Democratic Control of Lawmaking Power’, above n 52;
W David Slawson, Binding Promises: The Late 20th-Century Reformation of Contract Law
(1996) 22–3; Max Radin, ‘Contract Obligation and the Human Will’ (1943) 43 Columbia Law
Review 575; John Dalzell, ‘Duress by Economic Pressure’ (Pt 1) (1942) 20 North Carolina Law
Review 237.
115 Slawson, Binding Promises, above n 114, 21. Slawson goes on to make the bolder claim that ‘[a]
person today who refused to contract unless he understood what he was committing himself to
would deny himself most of the means of living in society’: at 21.
does not mean that all contractual obligations are non-voluntary, because it does
not deprive contracting parties of the capacity to choose between available
alternatives. It does, however, operate as a significant constraint on the ability of
non-drafting parties to avoid obligations arising from standard form terms.116 In
some situations the choice is severely constrained. For example, in order to
satisfy the need for housing, most individuals have no alternative but to choose
between a non-negotiable standard form lease and a non-negotiable standard
form mortgage.
4 The Legal Response
The factors considered above would be rendered irrelevant if the legal re-
sponse to standard forms ensured that their terms were binding only if they were
voluntarily accepted. Our particular interest here is the way in which the law
responds to terms that have not been read, terms whose implications could not be
understood and terms that are difficult or impossible in practice to avoid. The
starting point is that the terms set out in a signed, standard form contractual
document are normally binding, even if the signatory has not read the document
and has no knowledge of its terms.117 The terms set out in an unsigned contrac-
tual document are binding if the non-drafting party has assented to the terms118
or the drafting party has taken reasonable steps to bring the terms to the notice of
the non-drafting party before the contract is made.119 An onerous or unusual
provision in an unsigned contractual document is binding only if the drafting
party has taken the steps necessary to bring the relevant provision to the attention
of a reasonable person.120 Some Canadian and Australian cases have in the past
offered support for the view that an onerous or unusual provision in a signed,
standard form contractual document would in some circumstances be binding
only if the drafting party had taken reasonable steps to bring the relevant
provision to the attention of the non-drafting party.121 This view has now
been firmly rejected in Australia,122 however, and seems also to be out of
favour in Canada.123
116 Ibid 22–4.
117 Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 211 ALR 342; Parker v South Eastern
Railway Co (1877) 2 CPD 416, 421 (Mellish LJ); L’Estrange v F Graucob Ltd [1934] 2 KB 394.
In the US, § 211(1) of the Restatement (Second) of Contracts (1981) reflects a similar general
principle.
118 Parker v South Eastern Railway Co (1877) 2 CPD 416, 421 (Mellish LJ).
119 Oceanic Sun Line Special Shipping Co Inc v Fay (1988) 165 CLR 197, 228–9 (Brennan J);
Hood v Anchor Line (Henderson Bros) Ltd [1918] AC 837; Sir Guenter Treitel, The Law of
Contract (11th ed, 2003) 216–20, 245.
120 See, eg, Interfoto Picture Library Ltd v Stiletto Visual Programmes Ltd [1989] 2 QB 433;
Oceanic Sun Line Special Shipping Co Inc v Fay (1988) 165 CLR 197, 229 (Brennan J); Baltic
Shipping Co v Dillon; The ‘Mikhail Lermontov’ (1991) 22 NSWLR 1, 24–5 (Kirby P).
121 See especially, Tilden Rent-A-Car Company v Clendenning (1978) 83 DLR (3d) 400 and Toll
(FGCT) Pty Ltd v Alphapharm Pty Ltd (2003) 56 NSWLR 662.
122 Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2003) 56 NSWLR 662 was reversed on appeal in
Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 211 ALR 342.
123 The decision in Tilden Rent-A-Car Company v Clendenning is routinely distinguished as
applying only to contracts made ‘on-the-run’ (see, eg, Srivastava v TD Waterhouse (Unreported,
Ontario Superior Court of Justice, Hoilett J, 16 July 2003) [47]). Moreover, its correctness was
doubted by the Alberta Court of Appeal in Budget Rent-A-Car of Edmonton Ltd v University of
Toronto (1995) 165 AR 236.
At common law, then, it is clear that standard form terms are routinely binding
on parties who have not read them. Parties can also become bound by terms to
which they have not specifically assented, and the existence of which they were
not aware, provided reasonable notice has been given. Protective statutory
regimes provide some scope for relieving non-drafting parties of obligations and
curtailments of rights imposed by standard form contracts. An obvious difficulty
in making a general assessment of the effect of protective statutory regimes is
that the nature and extent of legislative protection differs from jurisdiction to
jurisdiction. It can be said, however, that although protective statutory regimes
enhance voluntariness to some extent, they generally fall well short of ensuring
voluntariness in standard form contracts. It would be impossible for any legisla-
tion to address all of the issues of knowledge and choice outlined above, but
legislatures do not generally seek to address these issues. Protective provisions
tend to be more concerned with policing substantively unfair terms — or unfair
conduct that results in the imposition of unfair terms — than with ensuring that
non-drafting parties exercise a meaningful and adequately informed choice in
everyday contracting. The more far-reaching protective provisions tend to
operate only in relation to particular classes of contract, and commonly operate
only for the benefit of individual or domestic consumers, rather than for business
consumers.
There are three principal types of legislative response to the problems thought
to arise from standard form contracts.124 The first approach is to regulate contract
content by specific provision.125 This approach is commonly adopted in relation
to consumer sales and consumer credit contracts, and involves the direct control
of terms considered to be unfair, such as warranty disclaimers and clauses
limiting liability.126 This approach attempts to ensure that the terms of contracts
governed by the legislation are substantively fair, and does not attempt to
enhance the non-drafting party’s knowledge or choice of contract terms.
The second approach is to regulate the contracting process. The aim here is to
give the consumer a better chance of informing himself or herself about the
terms being offered by the drafting party.127 Provisions of this type are also
commonly found in consumer credit legislation. They attempt to enhance the
consumer’s knowledge and understanding of contract terms by, for example,
requiring terms to be set out in plain language or a readable typeface, requiring
certain clauses to be printed in bold type or separately signed, or requiring
pre-contractual explanations, warnings or disclosures to be given to consum-
124 See Colin Scott and Julia Black, Cranston’s Consumers and the Law (3rd ed, 2000) 96–102, who
identify and evaluate four techniques: first, declaring invalid specific contract terms considered
objectionable; second, imposing a broad standard of fairness; third, authorising a public agency
to take action to have unfair terms declared void; and fourth, providing for mandatory approval
of standard form contracts; Edward Belobaba, ‘The Resolution of Common Law Contract Doc-
trinal Problems through Legislative and Administrative Intervention’ in Barry Reiter and John
Swan (eds), Studies in Contract Law (1980) 423, 450–9.
125 Arthur Leff, ‘Contract as Thing’ (1970) 19 American University Law Review 131, 147–57.
126 Farnsworth, above n 96, 517–19. See also Treitel, above n 119, 284–5.
127 Farnsworth, above n 96, 518–21. See also Schwartz and Wilde, above n 109; Jeffrey Davis,
‘Protecting Consumers from Overdisclosure and Gobbledygook: An Empirical Look at the
Simplification of Consumer-Credit Contracts’ (1977) 63 Virginia Law Review 841.
ers.128 Mandatory cooling-off periods also ensure that the consumer has time to
consider the wisdom of the transaction. These provisions may to some extent
enhance the consumer’s knowledge and understanding of contract terms in the
classes of contract they cover. Such provisions tend, however, to be limited in
their scope of application, and are commonly thought to be of little effect in
cases where they do apply.129 When they do enliven the consumer’s appreciation
of the meaning and significance of particular terms, they may not enhance the
consumer’s ability to choose whether to accept those terms, as this will depend
on the availability of alternatives.130
A third legislative response is a combination of the first two: the legislature
empowers a court to intervene where contracting conduct is, or contractual terms
are, unfair, unjust or unconscionable according to a range of criteria. Those
criteria tend to include aspects of procedural unfairness (unfairness in the
contracting process) and substantive unfairness (objectively unfair terms).131
This third type of legislation tends to be of the most general application. Since it
allows or directs the court to take account of procedural unfairness, it has some
potential for redressing the lack of meaningful choice commonly faced by parties
to standard form contracts. Some provisions of this type operate in relation to a
broad range of consumer contracts,132 others apply to commercial contracts,133
others to both.134 In the US, the unconscionability doctrine, both under § 2-302
of the Uniform Commercial Code (‘UCC’)135 and under the general law,136
allows for the close scrutiny of factors relevant to the question whether the
non-drafting party’s acceptance of terms was truly voluntary, including any
inequality of bargaining power, the use of deceptive sales practices and the
non-drafting party’s knowledge of, and ability to understand, the standard form
128 See, eg, Farnsworth, above n 96, 486, 518–21; William Whitford, ‘The Functions of Disclosure
Regulation in Consumer Transactions’ [1973] Wisconsin Law Review 400; N C Seddon and M P
Ellinghaus, Cheshire and Fifoot’s Law of Contract (8th Aust ed, 2002) 708, 728; John Goldring
et al, Consumer Protection Law (5th ed, 1998) especially chs 8–9. For specific examples, see
Unfair Terms in Consumer Contracts Regulations 1999 (UK) reg 7(1); Fair Trading Act 1999
(Vic) s 61; Consumer Credit Regulations 1995 (Qld); Family Law Act 1975 (Cth) s 90G.
129 See, eg, Farnsworth, above n 96, 520; Charles Knapp, ‘Taking Contracts Private: The Quiet
Revolution in Contract Law’ (2002) 71 Fordham Law Review 761, 792–4; Korobkin,
above n 53, 1234; Scott and Black, above n 124, 250–3; Belobaba, above n 124, 455–6; White
and Lesser Mansfield, above n 89, 234 fn 4, 260–1.
130 Knapp, ‘Taking Contracts Private’, above n 129, 794–5.
131 The distinction comes from Leff, ‘Unconscionability and the Code’, above n 57, 487.
132 See, eg, Unfair Terms in Consumer Contracts Regulations 1999 (UK); Contracts Review Act
1980 (NSW); Trade Practices Act 1974 (Cth) s 51AB.
133 Trade Practices Act 1974 (Cth) s 51AC.
134 Uniform Commercial Code § 2-302. See also the general law principle described in the
Restatement (Second) of Contracts § 208 (1981). Slawson, Binding Promises, above n 114, 25,
143, notes that in at least 40 per cent of cases since 1990, the unconscionability doctrine is
invoked by business consumers. See also Farnsworth, above n 96, 503–6 on this point.
135 Section 2-302(1) provides:
If the court as a matter of law finds the contract or any clause of the contract to have been un-
conscionable at the time it was made the court may refuse to enforce the contract, or it may
enforce the remainder of the contract without the unconscionable clause, or it may so limit the
application of any unconscionable clause as to avoid any unconscionable result.
136 See Restatement (Second) of Contracts § 208 (1981); Farnsworth, above n 96, 497.
terms.137 In New South Wales, the Contracts Review Act 1980 (NSW) (‘CRA’)
empowers a court to grant relief where it finds a consumer contract or a provi-
sion of a consumer contract to be ‘unjust in the circumstances relating to the
contract at the time it was made.’138 In determining whether a provision is unjust,
the court must take into account a list of factors going to the consumer’s ability
and opportunity in the circumstances of the transaction to protect himself or
herself against an unfair bargain.139
Neither the UCC unconscionability doctrine nor the CRA, however, redresses
the lack of meaningful choice in everyday consumer or business transactions.
William Whitford has suggested that this ‘vague admonitory legislation is
probably mostly symbolic in its effects, having little impact on the general
situation of consumers.’140 In each case, relief will generally be granted only
where a lack of meaningful choice is combined with substantive unfairness in the
form of unusually one-sided terms.141 ‘Unconscionability has generally been
recognized to include an absence of meaningful choice on the part of one of the
parties together with contract terms which are unreasonably favorable to the
other party.’142 It is said that the combined effect of § 2-302 of the UCC,
§ 211(3) of the Restatement (Second) of Contracts 143 and the ‘reasonable
expectations doctrine’144 is that US law ‘presumes the general enforceability of
standard terms, while negating terms that are procured unfairly, are unreasonable
137 Williams v Walker-Thomas Furniture Co, 350 F 2d 445, 449 (DC Cir, 1965) (Skelly Wright J).
138 CRA s 7(1). The court is given power to grant relief ‘for the purpose of avoiding as far as
practicable an unjust consequence or result’, including an order declaring the whole or part of
the contract void or varying the whole or part of the contract.
139 The relevant factors listed in CRA s 9(2) include: ‘any material inequality in bargaining power
between the parties’; whether the contract was negotiated; whether negotiation was reasonably
practicable; ‘the relative economic circumstances, educational background and literacy’ of the
parties; the physical form and intelligibility of the contract; whether the consumer was given
legal advice; whether the provisions of the contract were explained to the consumer; and
‘whether any undue influence, unfair pressure or unfair tactics were exerted’ against the con-
sumer.
140 William Whitford, ‘Structuring Consumer Protection Legislation to Maximize Effectiveness’
[1981] Wisconsin Law Review 1018, 1021.
141 See Farnsworth, above n 96, 507–10; Korobkin, above n 53, 1255–78; Hillman, ‘Rolling
Contracts’, above n 87, 749 (‘the strongest and most persuasive cases involve both’ a deficient
bargaining process and oppressive substantive terms), citing Bischoff v DirectTV Inc, 180 F Supp
2d 1097, 1107 (CD Cal, 2002) where Collins J said: ‘An adhesion contract is unconscionable
when both procedural unconscionability, meaning surprise or distress stemming from unequal
bargaining power, and substantive unconscionability, meaning overly harsh or one-sided terms
are present.’
142 Williams v Walker-Thomas Furniture Co, 350 F 2d 445, 449 (DC Cir, 1965) (Skelly Wright J)
(emphasis added) (citations omitted). Farnsworth, above n 96, 506 notes that this is ‘[p]erhaps
the most durable dictum on the meaning of “unconscionability”’ and that the courts ‘continue to
focus on both “unreasonably favorable” terms and an “absence of meaningful choice.”’ The
position is essentially the same under the New South Wales legislation: see West v AGC (Ad-
vances) Ltd (1986) 5 NSWLR 610, 621–2 (McHugh JA); Ben Zipser, ‘Unjust Contracts and the
Contracts Review Act 1980 (NSW)’ (2001) 17 Journal of Contract Law 76, 79.
143 Section 211(3) notes that where a party manifests assent to a document and ‘the other party [that
is, the drafting party] has reason to believe that the party manifesting such assent would not do
so if he knew that the writing contained a particular term, the term is not part of the agreement.’
144 This doctrine allows the courts to give effect to the reasonable expectations of the parties, even
when they are inconsistent with the express terms of the contract. It originated in the interpreta-
tion of insurance contracts and is now applied more broadly: see Slawson, Binding Promises,
above n 114.
or indecent, or are reasonably unexpected.’145 Accordingly, we may conclude

that while the US unconscionability doctrine and similar Australian legislation146
do police procedurally unfair conduct resulting in unfair terms, they do not
address the lack of understanding or the lack of choice in day-to-day contracting.
Provided unfair tactics are not used by the drafting party, and provided unusually
onerous conditions are not included, the terms set out in a quotidian,
non-negotiable, unread standard form contract signed by an individual or
business consumer remain binding under common law principles.
In the UK, both the Unfair Terms in Consumer Contracts Regulations 1999
(UK) (‘UTCCR’) and the Unfair Contract Terms Act 1977 (UK) c 50 (‘UCTA’)
combine aspects of the first and third approaches outlined above.147 The UTCCR
provides that an unfair term in a consumer contract is not binding on the con-
sumer.148 Regulation 5(1) provides that a term that
has not been individually negotiated shall be regarded as unfair if, contrary to
the requirement of good faith, it causes a significant imbalance in the parties’
rights and obligations arising under the contract, to the detriment of the con-
sumer.149
Schedule 2 sets out an indicative list of terms that may be regarded as unfair. The
indicative list in sch 2 of the UTCCR focuses on matters of substantive fairness,
but does include a reference to terms that have the effect of ‘(i) irrevocably
binding the consumer to terms with which he had no real opportunity of becom-
ing acquainted before the conclusion of the contract’ and ‘(j) enabling the seller
or supplier to alter the terms of the contract unilaterally’.150 The UCTA invali-
dates standard form terms that unreasonably limit the liability of the drafting
party, and standard form terms that unreasonably require a consumer to indem-
nify another party against liability. The guidelines for assessing ‘reasonableness’
set out in sch 2 of the UCTA include (a) the relative strengths of the parties’
bargaining positions and (c) whether the consumer knew or ought to have known
of the ‘existence and extent of the term’.
Although the UTCCR and the UCTA do provide some scope for scrutinising
the quality of the non-drafting party’s assent to standard form terms, the main
focus in each case is on the substantive fairness of the terms. Thus both are
146 See, eg, Trade Practices Act 1974 (Cth) ss 51AB, 51AC, which address ‘unconscionable
conduct’ in certain consumer and business transactions; Consumer Credit (Victoria) Code s 70.
147 Provisions similar to those in the UTCCR have recently been introduced in Victoria: Fair
Trading Act 1999 (Vic) pt 2B, amended by the Fair Trading (Amendment) Act 2003 (Vic).
148 UTCCR s 8(1). See also Fair Trading Act 1999 (Vic) s 32Y(1): ‘An unfair term in a consumer
contract is void’.
149 See also, to similar effect, Fair Trading Act 1999 (Vic) s 32W, which provides that ‘[a] term in a
consumer contract is to be regarded as unfair if, contrary to the requirements of good faith and in
all the circumstances, it causes a significant imbalance in the parties’ rights and obligations
arising under the contract to the detriment of the consumer’; s 32X, which provides that ‘in
determining whether a term of a consumer contract is unfair, a court or the [Victorian Civil and
Administrative] Tribunal may take into account, among other matters, whether the term was
individually negotiated’.
150 The corresponding list in the Fair Trading Act 1999 (Vic) s 32X includes ‘(d) permitting the
supplier but not the consumer to vary the terms of the contract’ but does not include an equiva-
lent to para (i) on the UTCCR’s indicative list.
primarily concerned to address problems thought to arise from consumer

ignorance and unavoidability of contract terms, rather than to address ignorance
or unavoidability themselves. The point being made here is not that this legisla-
tion could or should overcome ignorance or unavoidability. Rather, the point is
that this legislation is of only marginal significance to the argument being made
in this article, because the legislation is essentially concerned with substantive
fairness, rather than voluntariness issues. Under both the UCTA and the UTCCR,
agreements are policed to ensure conformity to community standards of what
ought and ought not to be in the agreement, rather than a concern to ensure that
the terms set out in the document have not been imposed on the consumer, or a
concern to ensure that the consumer’s assent to the terms was meaningful.
Indeed, the UTCCR has been criticised for focusing on substantive fairness
rather than informed consent.151
It is clear from this brief discussion that while protective legislation does
enhance voluntariness in standard form contracting, it does not compel the
conclusion that the legal effects of standard forms are always voluntarily
assumed by the non-drafting party. Even if we could go so far as to say that
standard form terms are binding only if they are fair and of a kind that a reason-
able person would not be surprised to find in the relevant document (and most
jurisdictions clearly fall well short of this level of protection), such protections
do not ensure that the obligations and curtailments of rights created by standard
forms are voluntary. They do not ensure that there is an appreciable choice left to
the non-drafting party, nor do they ensure that the non-drafting party has even a
basic understanding of the obligations imposed by the contract or the rights
curtailed. We can therefore conclude that, although the legal response to standard
form contracts goes some way towards ensuring that the most egregious exam-
ples of unknown, unknowable and unavoidable terms are not binding, it does not
substantially overcome the impediments to voluntariness in standard form
contracting. Consumer protection legislation quite properly focuses on ensuring
substantive fairness, rather than the more elusive task of ensuring that contrac-
tual obligations and curtailments of rights are substantially voluntary.152
5 Voluntariness and Standard Form Terms
In light of the contracting practices and legal response described above, can
contractual rights and obligations in general accurately be characterised as
‘voluntary’? Most written contracts are made by standard form. Standard form
terms are commonly adopted without being read. In some cases they become
binding without any indication of genuine assent. The terms are generally not
negotiable. It is extremely difficult to avoid particular obligations or curtailments
of rights by shopping for different terms, because of the uniformity of available
151 Matthew Chapman, ‘Common Law Contract and Consent: Signature and Objectivity’ (1998) 49
Northern Ireland Legal Quarterly 363.
152 See, eg, Richard Speidel, ‘Unconscionability, Assent and Consumer Protection’ (1970) 31
University of Pittsburgh Law Review 359, 374; Leff, ‘Unconscionability and the Code’,
above n 57; Leff, ‘Contract as Thing’, above n 125, 147–57; Leff, ‘Unconscionability and the
Crowd’, above n 106, 352, 354–5. See also Korobkin, above n 53; Collins, Regulating Con-
tracts, above n 55, ch 11.
terms, the need to understand the legal implications of the terms, and the cost
and cognitive barriers to comparison of available terms. This suggests that it is
not possible to make an accurate claim about the voluntariness of contractual
obligations in general. A more sophisticated approach must be adopted.
First, a distinction must be drawn between negotiated or specifically agreed
terms and standard form terms. Second, it is necessary to distinguish between
read and unread standard form terms. Third, a distinction should be drawn
between terms that are specifically assented to (through signature or by clicking
‘I agree’) and those that become binding on the basis of reasonable notice.
Fourth, we need to consider why contracting parties fail to read standard form
terms. A distinction must be drawn between the decision not to read that is
substantially voluntary, and the decision not to read that is substantially
non-voluntary. Fifth, the extent to which the legal implications of the terms are
understood by the non-drafting party must be taken into account. Sixth, it is
necessary to recognise the strong practical difficulties that individual and
business consumers face in avoiding standard form terms.
There can be no doubt that in many situations the obligations arising from
standard form terms can be regarded as voluntary. But if the factors listed above
are taken into account, it must be accepted that legal obligations commonly arise
from standard form terms in the absence of a substantial understanding and a
substantially unconstrained choice. The contractual obligations undertaken in
these circumstances are clearly not best understood as voluntary obligations.
B The Courts and Contract Doctrine

The second impediment to identifying contractual obligations as voluntary
derives from the role played by the courts in shaping such obligations. The
courts influence the existence and the content of contractual obligations by
adopting objective tests relating to contract formation and the incorporation and
interpretation of contract terms, and by filling gaps in contracts and applying the
default rules of contract law relating to implied terms, termination and contract
remedies.153 By the 1980s, there appeared to be a scholarly consensus recognis-
ing that the courts play a significant role in shaping contractual obligations by
reference to standards external to the parties.154 More recently, however, a
scholarly movement has begun to challenge this view.155 Linguistic philosophy
has been marshalled in support of the idea that the objective approach to
interpretation does in fact give effect to the actual intentions of the parties. The
implication of terms is said to be part of this process of interpretation, and we are
told that there are far fewer gaps in contracts than we thought. Both ‘gap-fillers’
and contract remedies are said to derive from the agreement itself. It is said that
the answer to frustration cases can be found in the agreements in question, and so
153 Jean Braucher, ‘Contract versus Contractarianism: The Regulatory Role of Contract Law’ (1990)
47 Washington and Lee Law Review 697, 712 has identified three ‘normative dimensions’ in
which ‘the regulatory role of contract law is played out’: validity, interpretation and gap-filling.
154 The publication of Charles Fried’s Contract as Promise: A Theory of Contractual Obligation in
1981 could be seen as marking this point.
155 See below n 185 and accompanying text.
‘[n]eo-classical theorists can reclaim excuse cases for the sphere of

party-oriented, voluntary obligations.’156
1 The Objective Approaches to Formation, Incorporation and Interpretation
As noted in the introduction to this article, the neoclassical understanding of
contract is to some extent shaped by the objective focus of contract doctrine. A
contract is no longer seen to represent the will of the parties, but rather to ‘reflect
the will of the parties, objectively determined.’157 As we will see, the objective
nature of contract doctrine does not seriously undermine the idea that contractual
obligations can be regarded as voluntary, but it does show that there is more
going on in the application of the principles of formation, incorporation of terms
and interpretation of contracts than simply giving effect to the intentions of the
parties.
The existence of a contract, and the identification and interpretation of its
terms, are all approached on an objective basis. When deciding whether a
contract has been made, identifying the terms of the contract and deciding what
they mean, the courts do not look to what the parties intended, but what they
appear to have intended. The use of these objective standards in contract law has
been criticised for undervaluing freedom of choice and freedom of contract.158 It
is said that a subjective theory would pay better regard to individual choice and
the interest in freedom of contract.159 For Fried, when courts adopt an objective
approach to interpretation they impose an external standard on the parties and the
resulting obligations cannot be regarded as contractual.160
A close reading of Barnett’s work makes clear that protecting reliance plays a
crucial role in the principles of formation, incorporation of terms and interpreta-
tion of contracts. Barnett’s ‘consent’ theory of contract is not a theory of obliga-
tion arising from consent, but a theory of obligation arising from particular
behaviour. It does not matter whether a person signing a standard form contract
intends to be bound, Barnett says, because the signing party ‘knows that the
other party will take this conduct as indicating consent to be bound thereby.’161
The law of contract adopts objective tests because we do not have access to a
person’s actual intentions.162 By judging intentions from words and behaviour,
the law of contract protects ‘the rights and liberty interests of others, whose plans
and expectations would be severely limited if they were not entitled to rely on
things as they appear to be and to take the assertive conduct of others at face
value.’163 The objective approach thus protects reliance by promisees,164 and the
156 Andrew Morris, ‘Practical Reasoning and Contract as Promise: Extending Contract-Based
Criteria to Decide Excuse Cases’ (1997) 56 Cambridge Law Journal 147, 174. See below nn
263–8.
157 Biotechnology Australia Pty Ltd v Pace (1988) 15 NSWLR 130, 132 (Kirby P).
158 See, eg, Malcolm Sharp, ‘Mr Justice Holmes: Contracts’ (1964) 31 University of Chicago Law
Review 268, 276–8; Clarke Whittier, ‘The Restatement of Contracts and Mutual Assent’ (1929)
17 California Law Review 441, 442–3.
159 Sharp, above n 158, 277.
160 Fried, above n 26, 61.
161 Barnett, ‘Consenting to Form Contracts’, above n 56, 635.
162 Barnett, ‘A Consent Theory of Contract’, above n 29, 305.
163 Ibid 306 (emphasis in original) (citations omitted).
need to protect reliance ultimately trumps the need for consent.165 Barnett argues
that we should attribute responsibility to those who engage in contractual
behaviour, not because they have consented to the transfer of entitlements, but so
that those who deal with them can rely on their behaviour. Thus we can see that
Barnett’s theory, in spite of its name, is not a consent theory, but a more complex
theory of contractual obligation in which the protection of reliance plays a
pivotal role.166
Deciding whether a contract has been formed involves interpretation of the
conduct of the parties.167 According to the objective approach to formation,
contracts are made when parties behave in particular ways, regardless of their
actual intentions. We look to whether the parties appear to have reached a
consensus, whether they appear to have intended to create legal relations, and
whether they appear to have agreed to exchange one thing for another.168 A
corollary of the objective approach to formation is that a mistake by one of the
parties as to the terms or the subject matter will not generally prevent the
mistaken party from being bound.169 A contract is therefore an obligation that
attaches by force of law to certain behaviour that usually, but not always,
represents the intentions of the parties.170 A contract can be formed against the
wishes of one of the contracting parties. The objective approach to formation
demonstrates that contractual obligations ultimately do not depend on consent or
the voluntary assumption of obligation.
The standard response to these observations is that the law can only judge
people’s intentions by their behaviour.171 This facilitates reliance on agreements.
The objective approach to contract formation can also be seen as a necessary
mechanism for dealing with ‘errors in communication’.172 Under this approach,
the closest we can get to a voluntary obligation is one that appears to be volun-
tarily assumed: this can only be judged from the promisor’s behaviour and the
surrounding circumstances. In most cases the parties’ apparent intentions will
coincide with their actual intentions. There is considerable force in this response.
164 Ibid 307. See also Randy Barnett, ‘The Sound of Silence: Default Rules and Contractual
Consent’ (1992) 78 Virginia Law Review 821, 857–9.
165 After justifying the objective approach on the basis of protecting reliance, Barnett attempts to
reclaim subjective consent on the basis that ‘a consent theory … is not indifferent to the fact that
the objective meaning of consent is likely to correspond to the subjectively held intentions of the
parties.’ For contract law to fulfil its function of giving effect to individual preferences, Barnett
says that ‘our objective interpretation of assent should mirror as nearly as possible … the subjec-
tive intentions of the parties’: Barnett, ‘The Sound of Silence’, above n 164, 876 (citations
omitted).
166 As Mikko Wennberg has observed, there are points at which ‘Barnett’s view begins to resemble
not will theory, but reliance theory’: Mikko Wennberg, ‘On Barnett’s Theory of Default Rules’
(2003) 16 Canadian Journal of Law and Jurisprudence 147, 153 (emphasis in original).
167 Braucher, above n 153, 723.
168 See Robertson, above n 9, 91–5.
169 Bell v Lever Brothers Ltd [1932] AC 161, 224 (Lord Atkin); Taylor v Johnson (1982) 151 CLR
422. See also Michael Trebilcock, ‘External Critiques of Laissez-Faire Contract Values’ in F H
Buckley (ed), The Fall and Rise of Freedom of Contract (1999) 78, 85.
170 Hotchkiss v National City Bank of New York, 200 F 287, 293 (SDNY, 1911).
171 See, eg, Barnett, ‘A Consent Theory of Contract’, above n 29, 305 et seq; Endicott, above n 10.
172 Richard Epstein, ‘Contracts Small and Contract Large: Contract Law through the Lens of
Laissez-Faire’ in F H Buckley (ed), The Fall and Rise of Freedom of Contract (1999) 25, 36.
It has been taken one step further by the argument, drawing on the work of
Ludwig Wittgenstein, that unexpressed intention is simply irrelevant to meaning.
An expression means what a reasonable person would take it to mean.173 On this
view, the existence of an agreement does not depend on a consensus ad idem, but
on the making of ‘mutually dependent promises’.174
It is clear that, taken by itself, the objective approach to contract formation is
not a formidable obstacle to the view that contractual obligations are voluntary.
Richard Epstein has criticised scholars such as P S Atiyah and Gilmore for
making broad claims about contract law based on analysis of ‘small points’ and
‘sideshows’ such as default rules or the rules of formation.175 Collected together,
however, these ‘small points’ paint an informative picture of contract law.
Indeed, contract law is simply a collection of small points, such as the rules of
formation, interpretation and remedies. When these contract doctrines are viewed
together, we see the emergence of a pattern in which the courts routinely fix
norms of behaviour and determine contractual rights and obligations in accor-
dance with those norms.
Courts also shape contractual obligations through the application of objective
tests to determine the content of agreements. A pre-contractual statement
constitutes a contractual promise ‘[i]f an intelligent bystander would reasonably
infer that a warranty was intended’ and this ‘depends on the conduct of the
parties, on their words and behaviour, rather than on their thoughts.’176 Written
terms form part of a contract if the non-drafting party has objectively manifested
assent to the terms by signature, or the drafting party has done what is reasona-
bly necessary to bring them to the attention of the non-drafting party.177 As we
saw in the discussion of standard form contracts above, the objective approach to
the incorporation of terms leaves great scope for parties to become bound by
obligations that cannot be said to have been voluntarily assumed. This is
particularly so when terms are incorporated by way of reasonable notice, without
any manifestation of assent such as signature or clicking ‘I agree’.
Once it is decided that particular language forms part of the contract between
the parties, the courts shape contractual obligations through the interpretation of
the meaning of that language.178 The courts have in the past occasionally applied
patently artificial techniques of ‘construction’ in order to avoid unfair outcomes
that were undoubtedly intended by the parties drafting the agreements.179 Lord
173 David Goddard, ‘The Myth of Subjectivity’ (1987) 7 Legal Studies 263, 271.
174 Ibid 268.
175 Epstein, ‘Contracts Small and Contract Large’, above n 172, 61.
176 Oscar Chess Ltd v Williams [1957] 1 All ER 325, 328 (Denning LJ).
177 Hood v Anchor Line (Henderson Bros) Ltd [1918] AC 837; McCutcheon v David MacBrayne
Ltd [1964] 1 All ER 430, 433 (Lord Hodson); Oceanic Sun Line Special Shipping Co Inc v Fay
(1988) 165 CLR 197, 229 (Brennan J); Treitel, above n 119, 216–19.
178 Braucher, above n 153, 722–30. See also Goldsbrough, Mort & Co Ltd v Quinn (1910) 10 CLR
674, 685, where O’Connor J stated that a contracting party is ‘bound in case of dispute to the
interpretation which a Court of law may put upon the instrument … [and] … cannot at law
escape from the binding effect of his contract on the ground that he did not in his own mind
intend the words’ to have the meaning the court places on them.
179 Barry Reiter, ‘The Control of Contract Power’ (1981) 1 Oxford Journal of Legal Studies 347,
360. See also Llewellyn, The Common Law Tradition, above n 101, 364–5.
Denning MR famously observed that even when the judges worshipped the idol
‘freedom of contract’, they concealed beneath their cloaks a secret weapon called
‘the true construction of the contract’ and ‘used it to stab the idol in the back.’180
It may well be, as Lord Denning MR suggested, that patently artificial ‘construc-
tion’ is a thing of the past. Contemporary Australian cases interpreting limitation
of liability clauses certainly suggest that this is the case.181 Parties making a
contract must, however, ultimately submit themselves to the court’s interpreta-
tion of the language they have used to express their rights and obligations.182 The
courts interpret the language objectively, according to what a reasonable person
would think was intended.183 Extrinsic evidence of what the parties actually
intended is excluded or disregarded.184
As with the objective approach to formation, the objective approach to inter-
pretation can be reconciled with a voluntaristic conception of contract on the
basis that it is necessary to facilitate reliance on agreements, and it is commonly
thought to provide a reliable guide to what the parties themselves intended in
most cases. More recently, some contract scholars have argued that since
language can only be understood against a shared background of knowledge, that
shared background must be regarded as part of the agreement. The objectively
apparent meaning of a particular utterance must be regarded as the meaning.185
Notwithstanding this, contracts do, at times, create rights and obligations that are
clearly not intended by one of the parties. In exceptional circumstances, con-
tracts create rights and obligations intended by neither party. To take a prominent
recent example, in Brambles Holdings Ltd v Bathurst City Council 186 contracting
parties were held to an interpretation of the contract that appeared to be intended
by neither party.187 A contract dealing with ‘general commercial waste’ was held
to cover liquid waste because, on an objective interpretation, ‘general commer-
cial waste’ included liquid waste. Evidence of a mutual belief that the contract
180 George Mitchell (Chesterhall) Ltd v Finney Lock Seeds Ltd [1983] QB 284, 297.
181 See, eg, Darlington Futures Ltd v Delco Australia Pty Ltd (1986) 161 CLR 500, 510–11 (Mason,
Wilson, Brennan, Deane and Dawson JJ); Nissho Iwai Australia Ltd v Malaysian International
Shipping Corporation Berhad (1989) 167 CLR 219, 227 (Mason CJ, Brennan, Deane, Gaudron
and McHugh JJ).
182 David Charny, ‘Hypothetical Bargains: The Normative Structure of Contract Interpretation’
(1991) 89 Michigan Law Review 1815, 1819 explains why ‘no text can completely specify its
own means of interpretation’.
183 Reardon Smith Line Ltd v Hansen-Tangen; The ‘Diana Prosperity’ [1976] 3 All ER 570, 574
(Lord Wilberforce); Investors Compensation Scheme Ltd v West Bromwich Building Society
[1998] 1 All ER 98, 114 (Lord Hoffmann).
184 Trebilcock, ‘External Critiques of Laissez-Faire Contract Values’, above n 169, 83 has observed
that the sanctity of written agreements, reinforced by the parol evidence rule, is ‘obviously an
embarrassment for consent-based or autonomy theories of contractual obligation’.
185 See, eg, Goddard, above n 173; Brian Langille and Arthur Ripstein, ‘Strictly Speaking — It
Went without Saying’ (1996) 2 Legal Theory 63 (see below nn 243–62 and accompanying text);
Endicott, above n 10; Adam Kramer, ‘Common Sense Principles of Contract Interpretation (And
How We’ve Been Using Them All Along)’ (2003) 23 Oxford Journal of Legal Studies 173;
Adam Kramer, ‘Implication in Fact as an Instance of Contractual Interpretation’ (2004) 63 Cam-
bridge Law Journal 384 (see below nn 203–5 and accompanying text); Adam Kramer, ‘An
Agreement-Centred Approach to Remoteness and Contract Damages’ in Ewan McKendrick and
Nili Cohen (eds), Comparative Remedies for Breach of Contract (2005) 249.
186 (2001) 53 NSWLR 153.
187 See the explanation given in Robertson, above n 9, 95–7.
did not regulate the charging of fees for liquid waste was held to be irrelevant
and inadmissible. The New South Wales Court of Appeal held that the parties
were simply ‘wrong’ in their understanding of the meaning of the agreement.188
This case serves as a stark reminder of Oliver Wendell Holmes’ claim that
‘nothing is more certain than that parties may be bound by a contract to things
that neither of them intended.’189 The process of interpretation is not simply a
matter of identifying what the parties intended. Cases such as Brambles Holdings
Ltd v Bathurst City Council are hardly common, however, and neither they, nor
the objective approach to interpretation can, on their own, be regarded as a
formidable obstacle to the conclusion that contractual obligations are generally
voluntarily assumed.
2 Gap-Filling and Default Rules
The courts play a more significant role in fashioning the rights and obligations
of contracting parties in relation to imprecise stipulations, unallocated risks,
unforeseen circumstances and the remedial consequences of breach. Some
scholars who adopt a strongly voluntaristic conception of contract accept that all
contracts are incomplete.190 Even the most comprehensive agreements contain
gaps relating to remote contingencies or remedies. There are several causes of
contractual incompleteness.191 Contracting parties are unable to anticipate all
possible future contingencies.192 Transaction costs require the parties to be
selective in planning and drafting. The cost of dealing with a particular contin-
gency may be disproportionate to the likelihood of the event occurring or the
perceived benefit of making specific provision.193 The negotiation of remote
contingencies may unnecessarily reveal areas of disagreement between the
parties.194 Social or business practices may also play a role: by convention, some
contracts contain no express terms, leaving the law to imply all rights and
obligations on each side.195 Jean Braucher has even suggested that the term
188 (2001) 53 NSWLR 153, 193 (Ipp AJA).

189 Oliver Wendell Holmes, ‘The Path of the Law’ (1897) 10 Harvard Law Review 457, 463.
190 Barnett, ‘The Sound of Silence’, above n 164, 821. See also Photo Production Ltd v Securicor
Transport Ltd [1980] AC 827, 848, where Lord Diplock states: ‘in practice a commercial con-
tract never states all the primary obligations of the parties in full; many are left to be incorpo-
rated by implication of law from the legal nature of the contract into which the parties are enter-
ing’. But see Langille and Ripstein, above n 185, discussed below nn 243–62 and accompanying
text.
191 See Alan Schwartz, ‘Relational Contracts in the Courts: An Analysis of Incomplete Agreements
and Judicial Strategies’ (1992) 21 Journal of Legal Studies 271, 278–9; Clayton Gillette, ‘Coop-
eration and Convention in Contractual Defaults’ (1993) 3 Southern California Interdisciplinary
Law Journal 167, 170–1; Robert Hillman, The Richness of Contract Law: An Analysis and
Critique of Contemporary Theories of Contract Law (1997) 32–3.
192 Macneil, ‘The Many Futures of Contracts’, above n 39, 726–7.
193 See Schwartz, ‘Relational Contracts in the Courts’, above n 191, 278; Gillette, ‘Cooperation and
Convention in Contractual Defaults’, above n 191, 171–2; Clayton Gillette, ‘Commercial Rela-
tionships and the Selection of Default Rules for Remote Risks’ (1990) 19 Journal of Legal
Studies 535, 543.
194 Hillman, ‘The Richness of Contract Law’, above n 191, 33.
195 For example, contracts are routinely made between medical specialists and their patients in
which neither the fee nor the obligations of the specialist are discussed in advance of perform-
ance. See also Atiyah, The Rise and Fall of Freedom of Contract, above n 1, 734.
‘gap-filling’, is ‘a misnomer because the “gaps” the law has to fill generally are
wider than the zones filled in by the parties.’196
Gap-filling occurs at both the primary level and the secondary or remedial
level. At the level of primary obligation, gaps are principally filled through the
implication of terms.197 I have elsewhere set out the well-known argument that
the implication of terms ‘by law’ and ‘in fact’ both depend on external policy
considerations and involve the imposition of standards such as ‘reasonableness’
and ‘fairness’ that are fixed by the law, not by the parties.198 This argument is
familiar and generally well-accepted.199 In 1904, Clarence Ashley stated that
despite the courts’ insistence that they are identifying the intent of the parties
when implying terms, this is a fiction, as the courts are actually imposing
obligations in the absence of intent.200 The Supreme Court of Canada has openly
acknowledged the role of the courts in defining contractual rights and obligations
through the implication of terms.201 The notion of intention is still commonly
invoked, although implied terms are now usually said to give effect to the
‘presumed’ or ‘imputed’ intention of the parties.202 Adam Kramer claims that the
reference to intention is not fictional because
one can intend what goes without saying and what does not cross one’s mind. A
communicator intends the background of social norms and his goals and prin-
ciples within which he (non-consciously) formulated his utterance. These
norms and goals and principles are thus intended to be used to determine issues
that are undetermined by the express utterance.203
If we accept that parties mean more than they actually say, this does not neces-
sarily mean that any supplementation by reference to what is reasonable accords
with the parties’ intentions. The role of public policy and independent standards
of reasonableness and fairness in the implication of terms is indisputable.204
Kramer’s claim is essentially that these standards, which are commonly consid-
196 Braucher, above n 153, 731. See also ibid. Cf Richard Epstein, ‘Confusion about Custom:
Disentangling Informal Customs from Standard Contractual Provisions’ (1999) 66 University of
Chicago Law Review 821, 828.
197 Gap-filling devices at the level of primary obligation also include the doctrine of frustration,
which releases parties from the obligation to perform in circumstances that are radically different
from what they intended. The idea that courts are filling gaps in frustration cases has been chal-
lenged by Langille and Ripstein, above n 185, and Morris, above n 156. See below nn 243–62
and accompanying text.
198 Robertson, above n 9, 97–101. See also Elisabeth Peden, ‘Policy Concerns behind Implication of
Terms in Law’ (2001) 117 Law Quarterly Review 459; Fried, above n 26, 60–1.
199 Although it has been challenged by Langille and Ripstein, above n 185, see below nn 243–62
and accompanying text; Kramer, ‘Implication in Fact as an Instance of Contractual Interpreta-
tion’, above n 185; see below n 202.
200 Clarence Ashley, ‘Should There Be Freedom of Contract’ (1904) 4 Columbia Law Review
423, 424.
201 British Columbia Hydro and Power Authority v BG Checo International Ltd (1993) 99 DLR (4th)
577, 585–6 (La Forest and McLachlin JJ).
202 See, eg, Byrne v Australian Airlines Ltd (1995) 185 CLR 410, 447 (McHugh and Gummow JJ);
Hughes v Greenwich London Borough Council [1994] 1 AC 170, 179 (Lord Lowry); Jeannie
Paterson, ‘Terms Implied in Fact: The Basis for Implication’ (1998) 13 Journal of Contract Law
103, 107–8.
203 Kramer, ‘Implication in Fact as an Instance of Contractual Interpretation’, above n 185, 385.
ered to be external, are in fact internal. Kirby P suggested in Biotechnology

Australia Pty Ltd v Pace 205 that imported standards of reasonableness and
fairness do not necessarily accord with the intentions of the parties because
contracting parties do not necessarily intend to be reasonable or fair. Ultimately,
though, Kramer’s claim is susceptible of neither proof nor disproof.
The role of contract law in filling gaps through the imposition of external
standards is even more pervasive at the remedial level.206 Enforceability is a
defining feature of contractual obligation. Burrows has expressed the view that
‘both primary and secondary obligations in contract belong together as stemming
from a voluntary obligation.’207 Contract law allows parties considerable
freedom to create a charter of their remedial rights and obligations,208 and
contract remedies are often affected by express terms, such as limitation of
liability clauses in standard form contracts.209 Remedial obligations are, how-
ever, very often left to be determined by the courts.210 Lon Fuller and William
Perdue drew our attention to the fact that the most basic principle in the law of
contract remedies, the expectation damages rule, is a rule that has been fashioned
by the courts, and cannot be explained by reference to the intention of the
parties.211 Indeed, Macaulay found that the legal entitlement to expectation
damages in the event of breach was not reflected in the practices and understand-
ings of the business community he studied.212 Contract law also regulates,
without reference to the intentions of the parties, the circumstances in which
injunctions, specific performance and accounts of profits will be available.213
The mitigation principle imposes an external standard by preventing the recovery
of damages in respect of loss that would have been avoided by a reasonable
person in the position of the plaintiff. The standard of reasonableness also
controls the availability of damages to rectify defective building works, which
205 (1988) 15 NSWLR 130, 132–3.
207 Burrows, above n 21, 14 fn 43. See also Kramer, ‘An Agreement-Centred Approach to
Remoteness and Contract Damages’, above n 185.
208 Cf Baltic Shipping Co v Dillon; The ‘Mikhail Lermontov’ (1993) 176 CLR 344, 369, where
Brennan J said (with reference to the types of loss for which damages for breach of contract will
be awarded) that the institution of contract empowers parties ‘to create a charter of their rights
and obligations inter se’.
209 See, eg, ibid.
210 In light of the widespread use of limitation of liability clauses in standard form contracts, we
might not today put the point as strongly as Fuller and Perdue did in 1936: ‘If a contract repre-
sents a kind of private law, it is a law which usually says nothing at all about what should be
done when it is violated’: Lon Fuller and William Perdue, ‘The Reliance Interest in Contract
Damages’ (Pt 1) (1936) 46 Yale Law Journal 52, 58.
211 Ibid 52–3. See also Richard Craswell, ‘Contract Law, Default Rules, and the Philosophy of
Promising’ (1989) 88 Michigan Law Review 489, 517–20.
212 Macaulay, above n 62, 61, observes that buyers expected to be able to cancel orders without
liability, apart from an obligation to pay for major reliance loss (such as scrapped steel), and that
sales personnel accepted this. See Braucher, above n 153, 725.
213 J W Carter and Michael Tilbury, ‘Remedial Choice and Contract Drafting’ (1998) 13 Journal of
Contract Law 5, 34 fn 112 note that: ‘The fact that contracts sometimes contain clauses confer-
ring jurisdiction to order specific performance merely illustrates the wishful thinking of those
who draft contracts.’ The apparent intentions of the parties, or at least one of them, can also be
overridden by the law of penalties although, as noted above, this principally presents a challenge
to the autonomy claim rather than the voluntariness claim: see above nn 11–12 and accompany-
ing text.
are granted only when the defect is one that a reasonable person would rectify.214
The law of contract remedies can thus be seen as a substantial gap-filling device
based in large part on external social standards.
Barnett has observed that ‘the pervasiveness of contractual incompleteness’
and the idea that gap-fillers are ‘imposed by the legal system for reasons of
principle or policy … makes consent look quite irrelevant to the main issues of
contract theory.’215 Fried candidly acknowledges the disjunction between
gap-filling and the promise principle. He has observed that there is ‘a vaguely
marked boundary [in contract law] … between interpreting what was agreed to
and interpolating terms to which the parties in all probability would have agreed
but did not.’216 The further the courts stray from this boundary into the realm of
interpolation, ‘the more palpably are they imposing an agreement.’217 When
courts fill a gap by reference to what the parties might have agreed, the term is
imposed, and the courts are thus enforcing an external standard on the parties.
That the decision to imply a term is the court’s and not the parties’ is, Fried
observes, evidenced by the insistence that an implied term be fair to both
parties 218 ‘even if … the parties themselves might have been less fastidious.’219
Fried’s solution is to separate out the practice of gap-filling from contract proper.
Fried accepts that gaps in contracts must be filled, and this cannot be done by the
promise principle.220 When promise gives out, then, for Fried, ‘the residuary
principles of civil obligation’ take over, principally the tort principle requiring
compensation for harm done and the restitution principle requiring restoration of
benefits conferred.221
Thus Fried acknowledges that in many contract cases ‘actual intent is missing’
and the courts impose external standards of behaviour and fair outcomes on the
parties. Fried maintains, however, that, ‘by construing an allocation of burdens
and benefits that reasonable persons would have made’, the court is ‘respect[ing]
the autonomy of the parties so far as possible.’222 This raises the question
214 Ruxley Electronics & Constructions Ltd v Forsyth [1996] 1 AC 344; Bellgrove v Eldridge (1954)
90 CLR 613. As Michael Furmston has said, in Ruxley Electronics & Constructions Ltd v For-
syth ‘[t]he House of Lords attached much more importance to reasonableness than to intention’:
Michael Furmston, ‘How Modern Is English Contract Law?’ (2000) 39 Saggi, Conferenze e
Seminari 1, 7.
215 Barnett, ‘The Sound of Silence’, above n 164, 822–3. Barnett has sought to challenge the
accuracy of this perception, on the basis outlined below: see below nn 224–42 and accompany-
ing text.
216 Fried, above n 26, 60 (emphasis added).
217 Ibid 61.
218 See, eg, BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266, 283
(Lord Simon, Viscount Dilhorne and Lord Keith), where the requirement of implication on the
basis of business efficacy that the term sought to be implied must be ‘reasonable and equitable’.
219 Fried, above n 26, 61.
220 Ibid 69.
221 Many problems cannot, of course, be resolved by promissory principles, tort law or the law of
restitution. Fried suggests that the solution to these problems is to be found in the
(non-promissory) principle of ‘sharing’: ibid 69–73. According to this principle, losses and gains
not otherwise dealt with should be shared between the parties. Fried does not suggest that this
principle is to be found in the existing case law.
222 Ibid 73. By using the word ‘construing’, rather than ‘imposing’, Fried is surely guilty of the sin
that he earlier accuses ‘classical law’ of perpetrating; namely, dressing up an externally imposed
rule in the clothing of the parties’ will: at 60–1.
whether there is any connection between the imposition of a reasonable or fair

solution and respect for the autonomy of the parties. One possible connection
lies in the fact that the parties can contract out of these gap-filling devices by
express terms dealing with the contingency in question. Fried concludes that the
courts’ gap-filling role ‘does not threaten to overwhelm the promissory principle,
for the simple reason that the parties are quite free to control the meaning and
extent of their relation by the contract itself.’223 Thus Fried points to the argu-
ment since made in great detail by Barnett: that gap-filling may be rationalised
with the idea that contractual obligations are voluntary by attaching significance
to the ability of contracting parties to avoid default rules by express stipulation.
3 Gaps, Default Rules, Consent and Voluntariness
Therefore, as with standard forms, we must consider Barnett’s arguments in
some detail if we are to understand the extent to which default rules can be
understood as creating voluntary obligations. We must also consider the volun-
taristic rationalisations of the doctrine of frustration made more recently by
Brian Langille and Arthur Ripstein, and Andrew Morris. Barnett claims that
‘there can realistically be said to be consent even to the enforcement of the
default rules … [and] … the enforcement of judicially supplied default rules can
be said to be based on consent’.224 Barnett’s argument is that when parties
manifest an intention to be legally bound, they implicitly consent to the back-
ground rules of contract law that govern their agreement. Parties signal their
consent to applicable default rules by their failure to exclude them by express
agreement. For Barnett, the failure of the parties to contract around a default rule
indicates their consent to it, in the same way that, for Sherlock Holmes, the
failure of the dog to bark at the midnight visitor signalled the dog’s consent to
the visit, and thus indicated that the visitor was someone the dog knew well.225
Barnett suggests that the parties’ subjective intentions are most likely to be
satisfied by a default rule that reflects ‘the commonsense or conventional
expectations that likely are part of the tacit assumptions of particular parties.’226
Barnett’s theory assumes that the signal by which consent is said to be given is
unambiguous. In the case of a standard form, the non-drafting party generally
signals assent to the terms provided by the drafting party by signing a document
or clicking ‘I agree’. Signing follows a well-known social practice; clicking ‘I
agree’ is unambiguous. There is, however, a far more tenuous connection
between the default rules of contract law and the signal by which contracting
parties are said to communicate their assent to those rules. Barnett refers to two
different types of conduct as signalling indirect consent to default rules: first,
conduct by which the parties manifest an intention to be legally bound; and,
second, the act of remaining silent.227 Neither type of conduct is understood in
the community as signalling assent to the default rules of contract law. Neither
223 Ibid 73.
224 Barnett, ‘Consenting to Form Contracts’, above n 56, 644.
225 Barnett, ‘The Sound of Silence’, above n 164, 821, citing Sir Arthur Conan Doyle, ‘Silver Blaze’
in William Baring-Gould (ed), The Annotated Sherlock Holmes (1967) 260, 281.
226 Barnett, ‘The Sound of Silence’, above n 164, 880.
227 Ibid 827.
has a socially-understood connection with contract default rules. Moreover, as

every student of contract law knows, silence is not a reliable indicator of
assent.228 In this respect, Barnett’s claim that default rules are consensual is
weaker than his claim in relation to standard form terms.229
Barnett’s argument also depends on the contracting parties having knowledge,
either of the legal rules themselves or of well-established conventions that
underlie the legal rules. Barnett accepts that ‘silence is highly ambiguous’ in the
face of ‘rules that are costly to discover’230 and indicates consent to a default
rule only ‘when the transaction costs of discovering … the default rules are
sufficiently low’.231 Thus, he argues that where low stakes make it irrational for
parties to seek legal advice about a default rule, the rule should reflect common-
sense expectations so that it will ‘be most likely to accurately reflect the tacit
subjective agreement of these rationally ignorant parties.’232 But do conventional
expectations underlie the default rules of contract law? The entitlement to
expectation damages in the event of breach must be the most fundamental
default rule of contract law. As noted above, however, empirical evidence
suggests that this rule may not reflect community expectations, even amongst
businesspeople involved in sales transactions on a daily basis.233 Empirical
studies repeatedly reveal ignorance of basic principles of contract law amongst
experienced businesspeople.234 Even amongst lawyers and judges there are no
universal understandings relating to either the existence or the content of the
more contentious default rules, such as implied terms requiring contractual rights
to be exercised reasonably or in good faith.235
Barnett’s theory of default rules is also premised on contracting parties having
a practical ability to avoid such rules. That practical ability is routinely lacking.
Even if default rules reflect commonsense expectations, there remains the
question whether it is feasible to contract around them in the circumstances of a
particular transaction. It is certainly not feasible for parties to anticipate all
possible contingencies that may be governed by a default rule or to consider the
range of potentially applicable default rules.236 Where parties do anticipate the
application of undesirable default rules, transaction costs constitute a major
obstacle to the avoidance of those rules. Barnett’s argument is premised on
parties having ‘the opportunity to deviate from the default rules’237 and he
228 See, eg, Treitel, above n 119, 31–5; Restatement (Second) of Contracts § 69(1) cmt a (1981) and
the Reporter’s Note.
229 Barnett has likened default rules to standard form contracts: ‘In assessing the enforceability of
form contracts, we must never forget that contract law is itself one big form contract that goes
unread by most parties most of the time’: Barnett, ‘Consenting to Form Contracts’, above n 56,
644.
231 Ibid.
232 Ibid 886.
233 See above n 212 and accompanying text.
234 See, eg, Macaulay, above n 62; Beale and Dugdale, above n 67; Franklin Schultz, ‘The Firm
Offer Puzzle: A Study of Business Practice in the Construction Industry’ (1952) 19 University of
Chicago Law Review 237, 283.
235 See Robertson, above n 9, 106.
236 Braucher, above n 153, 731.
accepts that consent to a rule cannot be inferred from the parties’ silence ‘if
contracting around the rule is so costly that there is little point in raising the issue
in negotiation.’238 Barnett notes that, ‘[i]n the presence of rules that are costly
to … contract around, silence is highly ambiguous.’239 Accordingly, he only
claims that silence indicates consent to a default rule ‘when the transaction costs
of … contracting around the default rules are sufficiently low’.240
Finally, if Barnett’s notion of tacit consent is accepted, then it provides a
justification for all legal obligations that arise from deliberate conduct and reflect
commonsense or community expectations. To the extent that he has provided a
consent basis for contract default rules, he has also provided a consent basis for
the law of tort, or at least those tort obligations arising from deliberate conduct,
the legal consequences of which are well known. Barnett indicates that in some
circumstances, consent to immutable rules may be implied from silence.241 A tort
obligation that is better known and easier in practice to avoid than most contract
default rules must, on this view, be regarded as consensual.242 We might be
tempted to ask whether, as a practical matter, it is possible to behave in such a
way as to avoid the obligations imposed by the law of tort. If we are tempted to
ask this question in relation to tort obligations, then we must ask the same of
contractual obligations: how often are contracting parties free, as a practical
matter, to shape their rights and obligations according to their own wishes?
The voluntaristic view of contract is also potentially supported by Langille and
Ripstein’s argument that gap-filling devices can be seen to reflect the intentions
of contracting parties.243 They argue that apparently incomplete contracts are in
fact highly determinate, and suggest that the work of Wittgenstein tells us that
‘intentions always involve more than what comes to mind’.244 Thus, contracting
parties mean and ‘intend more than they thought’.245 Langille and Ripstein echo
Wittgenstein in suggesting that it goes without saying that a babysitter must not
teach children gaming with dice: ‘what the parent thought to mention explicitly
to the babysitter and what went unsaid are on the same footing.’246 Following
Donald Davidson, Langille and Ripstein suggest that communication (and
therefore contracting) requires a background of unexpressed but shared under-
standings, assumptions and beliefs. Custom, practice and usage are, they argue,
just particular ways in which we make sense of the world: ‘everything always
depends on our ability to locate what is being said to us in a shared, public, and
largely unarticulated and uncontemplated world where what is said is made
238 Ibid 866.

239 Ibid.
240 Ibid.
241 Barnett has argued that ‘[w]hen background rules are immutable, we cannot as readily interpret
silence as consent to their imposition’: ibid 902 (emphasis added).
242 See Robertson, above n 9, 104–6; Atiyah, ‘Contracts, Promises and the Law of Obligations’,
above n 9, 201–2, 221.
243 Langille and Ripstein, above n 185.
244 Ibid 71.
245 Ibid.
246 Ibid.
possible by what went without saying.’247 Thus, ‘applying the terms of our
contract to unanticipated situations … depends only on what we have reasonably
taken each other to have said.’248
Langille and Ripstein assert that the gap-filling view of the doctrine of frustra-
tion (that is, the view that courts ‘respond to the lack of explicit agreement by
resorting to some external standard of justice beyond the agreement of the
parties’) ‘does not survive this sort of understanding’.249 They suggest that we
can now see the gap-filling view of frustration ‘as entirely bankrupt.’250 This
conclusion is based on an analysis of Paradine v Jane 251 and Tay-
lor v Caldwell.252 In Paradine v Jane, a lease was held not to have been
frustrated by the invasion of ‘a certain German prince … with a hostile army’
which expelled the tenant and kept him out of possession for three years.253
Here, Langille and Ripstein suggest, it was obvious where the risk lay and the
‘parties could be presumed to know of this fact and were free to contract around
it’.254 Like Barnett, Langille and Ripstein assume knowledge of, and the ability
and resources to contract around, default rules. In Taylor v Caldwell, a contract
for the hire of a music hall was held to have been frustrated when the hall burnt
down. Langille and Ripstein say that, because the hirer of the hall ‘obviously
meant to bargain for the use of the music hall, the particular music hall was
plainly the object of the agreement.’255 It is, however, very difficult to see the
force of voluntas at work in the outcomes of these cases. Langille and Ripstein’s
explanation seems to be firmly grounded in the imaginary world of the reason-
able person. This is a world in which behaviour and expectations are so predict-
able and uniform that meaning is ‘plain’ and ‘obvious’. And what of
Krell v Henry,256 a more controversial casebook favourite? What happens if
rooms are hired to watch a coronation procession and the coronation is subse-
quently postponed due to illness? What, apart from ‘some external standard of
justice … is made available to us by the world we live in’257 to answer this
question? In Krell v Henry, the English Court of Appeal concluded that the
coronation procession was the unexpressed foundation of the contract, but it has
since been suggested that, by failing to stipulate the procession as an express
condition of performance, the hirer may be said to have taken his chance on the
247 Ibid 79.
248 Ibid 72.
249 Ibid 80.
250 Ibid.
251 (1647) Aleyn 26; 82 ER 897.
252 (1863) 3 B & S 826; 122 ER 309.
253 (1647) Aleyn 26, 26; 82 ER 897, 897.
254 Langille and Ripstein, above n 185, 80.
255 Ibid.
256 [1903] 2 KB 740. Langille and Ripstein, ibid 64, claim that in relation to unassigned risks
‘judges in different periods wander in different directions. Yet those disagreements are surpris-
ingly absent from the results those judges reach. They all know what to do; they simply don’t
know why’. However, in Scanlan’s New Neon Ltd v Tooheys Ltd (1942) 67 CLR 169, 188,
Latham CJ observed that ‘[t]he decision in Krell v Henry has perhaps aroused as much differ-
ence of legal opinion as any decision given by English courts during this century’ (citations
omitted).
257 Langille and Ripstein, above n 185, 80 (citations omitted).
event not happening.258 As with many frustration cases, it is neither plain nor
obvious where the risk lay.
In the end, Langille and Ripstein’s argument is that agreements implicitly
allocate risk and, because we mean more than we think, this allocation includes
‘risks that are not foreseen or even foreseeable, by either party.’259 But the idea
of implicit risk allocation is well known to students of contract law and is
notoriously unhelpful in dictating or predicting outcomes in implied terms and
frustration cases. If we accept that contracting parties mean more than what
comes to mind, that does not mean that there are no contractual gaps.260 Nor
does it pose a serious challenge to the widely held view that the reference to
implicit intention to fill gaps is a fiction.261 Langille and Ripstein assert that
‘agreements themselves turn out to be highly determinate … when the relation-
ship between the meaning of an agreement and the world in which it is made is
properly understood’.262 They do not, however, establish that there is any clear or
consistent connection between the outcomes of gap-filling cases and ‘the
agreement’ or the tacit intentions of the parties. They do not, therefore, offer any
support for the view that the legal obligations and curtailments of rights arising
from gap-filling doctrines such as implied terms and frustration can be regarded
as voluntarily assumed.
Morris has also attempted to ‘reclaim excuse cases for the sphere of
party-oriented, voluntary obligations’ on the basis that ‘[i]mpossibility, frustra-
tion and mistake decisions are grounded in the consent of the parties’.263 Like
Langille and Ripstein, Morris argues that frustration cases do not involve
contractual ‘gaps’ because the ‘court draws on the contract itself to create an
exception to the contract’s literal terms.’264 He convincingly argues that judges
are significantly constrained in frustration cases: they can ‘alter the contract’s
application only in the direction of narrowing its application’ and can only do so
by identifying an implicit purpose that ‘makes sense in the context of all of the
fact-sets to which the contract uncontroversially applies’.265 Morris does not,
however, make good his claim that the answer to frustration cases is to be found
in the agreement itself. His argument is centred on the idea that frustration cases
involve the identification of a factor that was not mentioned in the agreement,
but must be added ‘to the contract’s factual predicate’ so that ‘the contract makes
sense’.266 In Krell v Henry, Morris suggests, this factor was the occurrence of the
coronation. Morris correctly points out that the court exercises a tightly con-
258 Larrinaga & Co Ltd v Société Franco-Américaine des Phosphates de Medulla Paris (1922) 29
Com Cas 1, 7 (Lord Finlay LC), quoted in Maritime National Fish Ltd v Ocean Trawlers Ltd
[1935] AC 524, 528–9 (Lord Wright) and discussed in Codelfa Construction Pty Ltd v State Rail
Authority of New South Wales (1982) 149 CLR 337, 358 (Mason J).
259 Langille and Ripstein, above n 185, 81.
260 On this point, see also Endicott, above n 10, 164–5.
261 See, eg, Robert Hillman, ‘An Analysis of the Cessation of Contractual Relations’ (1983) 68
Cornell Law Review 617, 627–8.
262 Langille and Ripstein, above n 185, 63–4.
263 Morris, above n 156, 174.
264 Ibid.
265 Ibid 166 (emphasis in original).
266 Ibid 167.
strained choice in identifying the missing part of the factual predicate, because
this must be done in such a way that it does not affect the ordinary operation of
the contract.267 But in most frustration cases the identification of the (arguably)
missing part of the factual predicate is uncontroversial. Rather, the decisive
question is whether the contract ‘makes sense’ without the inclusion of what is
said to be the ‘missing fact’ in the predicate. This is the matter on which views
differ. Those who criticise the decision in Krell v Henry do so on the basis that
the contract ‘makes sense’ without the inclusion of the coronation in its factual
predicate, because the hirer assumed the risk of the event not happening. Thus,
Morris does not justify his claim that ‘the validity of the legal answer [to
frustration cases] stems from its source in the parties’ agreement rather than from
a source elsewhere in the legal system.’268
IV C O N C L U S I O N
A great deal of thinking about contract law is based on the idea that contractual
obligations and curtailments of rights are, or should be, enforced against
contracting parties because those conditions have been voluntarily assumed. This
article has shown that contracts and contract law cannot be seen in such simple
terms. The sweeping claim that contractual obligations are voluntary is mislead-
ing. Contractual obligations arise from a variety of sources and in a wide range
of different situations. Many contractual obligations can be seen as substantially
voluntary, but many cannot. Many contractual obligations arise from standard
form terms, which are commonly unread, commonly misunderstood and rou-
tinely unavoidable due to the lack of available alternatives. In some cases, the
obligations and curtailments of rights arising from unread standard form terms
can be regarded as voluntary, but in others they cannot. In exceptional cases, the
objective approaches to formation and interpretation of contracts result in parties
becoming subject to obligations which they cannot be said to have voluntarily
assumed. The objective approach to the incorporation of terms, particularly
unsigned terms, leaves even greater scope for parties to become subject to
obligations that have not been voluntarily assumed. Obligations routinely arise
from the default rules of contract law, which appear not to be well understood,
even in the commercial community, and are often difficult to avoid. The claim
that these obligations inhere in the agreement itself has not been made out.
Contractual obligations and curtailments of rights are routinely fashioned by one
contracting party in the ignorance of the other, or by the state in the ignorance of
both, and are commonly practically unavoidable for one or both parties.
The conclusion that contractual obligations as a class cannot accurately be
characterised as voluntary does not of course mean that we are left without a
basis for the enforcement of contracts. It is well accepted in the contract litera-
ture that the rationale for the enforcement of contracts is more complex.269 This
267 Ibid.
268 Ibid 174.
269 Note, for example, that leading autonomy theorist Randy Barnett accepts that other factors are
involved, such as the need to protect reliance: see above nn 161–6 and accompanying text.
article suggests that some influential contract texts give a misleading sense of
contract as a sphere of individual freedom, particularly if one accepts that most
fully-negotiated contracts are made by organisations, rather than individuals, and
that most standard form terms are drafted on behalf of organisations, rather than
individuals.270 The conclusion as to the limits of voluntariness in contract also
has normative implications. Rather than looking to the voluntary assumption of
obligation as a touchstone for the development of contract doctrine or the
resolution of difficult issues, we need to embrace a more sophisticated concep-
tion of contract law, incorporating what Hillman has described as ‘a rich combi-
nation of normative approaches and theories of obligation.’271
270 Braucher, above n 153, 706 fn 38; Llewellyn, ‘What Price Contract?’, above n 101, 733 fn 63;
Photo Production v Securicor Transport Ltd [1980] AC 827, 848 (Lord Diplock). See also
George Mitchell (Chesterhall) Ltd v Finney Lock Seeds Ltd [1983] QB 284, 297 (Lord
Denning MR).
271 Hillman, The Richness of Contract Law, above n 191, 6.

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—M.U.L.R- Robertson completed (2).

THE LIMITS OF VOLUNTARINESS IN CONTRACT

[Contractual obligations are routinely characterised in the contract literature as voluntary or

180 Melbourne University Law Review [Vol 29

2005] The Limits of Voluntariness in Contract 181

voluntary and involuntary obligations.’7 Craswell’s two statements accurately

7 Ibid 130 (citations omitted).

182 Melbourne University Law Review [Vol 29

A The Voluntariness Claim

2005] The Limits of Voluntariness in Contract 183

184 Melbourne University Law Review [Vol 29

B Voluntary Actions and Voluntary Obligations

2005] The Limits of Voluntariness in Contract 185

186 Melbourne University Law Review [Vol 29

depend on contracting parties generally behaving intentionally and being

C Obligations and Curtailments of Rights

47 Feinberg, above n 37, 48 (emphasis added).

2005] The Limits of Voluntariness in Contract 187

A Standard Form Contracts

188 Melbourne University Law Review [Vol 29

2005] The Limits of Voluntariness in Contract 189

190 Melbourne University Law Review [Vol 29

them.70 Although most respondents in both studies claimed to understand the

2005] The Limits of Voluntariness in Contract 191

192 Melbourne University Law Review [Vol 29

repeatedly shown that ‘people are unrealistically optimistic.’83 The human

2005] The Limits of Voluntariness in Contract 193

194 Melbourne University Law Review [Vol 29

2005] The Limits of Voluntariness in Contract 195

196 Melbourne University Law Review [Vol 29

2005] The Limits of Voluntariness in Contract 197

198 Melbourne University Law Review [Vol 29

2005] The Limits of Voluntariness in Contract 199

200 Melbourne University Law Review [Vol 29

or indecent, or are reasonably unexpected.’145 Accordingly, we may conclude

2005] The Limits of Voluntariness in Contract 201

primarily concerned to address problems thought to arise from consumer

202 Melbourne University Law Review [Vol 29

B The Courts and Contract Doctrine

2005] The Limits of Voluntariness in Contract 203

‘[n]eo-classical theorists can reclaim excuse cases for the sphere of

204 Melbourne University Law Review [Vol 29

2005] The Limits of Voluntariness in Contract 205

206 Melbourne University Law Review [Vol 29

2005] The Limits of Voluntariness in Contract 207

188 (2001) 53 NSWLR 153, 193 (Ipp AJA).

208 Melbourne University Law Review [Vol 29

2005] The Limits of Voluntariness in Contract 209

ered to be external, are in fact internal. Kirby P suggested in Biotechnology

210 Melbourne University Law Review [Vol 29

2005] The Limits of Voluntariness in Contract 211

whether there is any connection between the imposition of a reasonable or fair

212 Melbourne University Law Review [Vol 29

has a socially-understood connection with contract default rules. Moreover, as

2005] The Limits of Voluntariness in Contract 213

238 Ibid 866.

214 Melbourne University Law Review [Vol 29

2005] The Limits of Voluntariness in Contract 215

216 Melbourne University Law Review [Vol 29