Vote Postponed on Controversial ALI Restatement of Consumer Contracts Draft

The influential American Law Institute (ALI) recently held its 96th Annual Meeting in Washington DC on May 19 - 22, at which topics such as Artificial Intelligence, Policing, The Law of American Indians, and Data Privacy were discussed. ALI members voted to approve drafts of the Restatements of Law for The U.S. Law of International Commercial and Investor-State Arbitration and the Charitable Nonprofit Organizations, marking the completion of both projects. Amidst ongoing controversy, however, ALI members tabled a decision on a draft regarding the Restatement of the Law of Consumer Contracts, according to ProPublica journalist Ian MacDougall.

MacDougall reported that a vote to approve the draft of this Restatement would “make it easier for online businesses to dispense with that click [to agree to digital contracts] and allow websites… to bind you to contract terms without your agreement or awareness.” Critics and consumer advocates see the current draft as favorable to business interests and believe that the proposal does not accurately reflect the state of the law. Twenty-four State Attorneys General signed a letter setting forth their concerns that it “represents an abandonment of important principles of consumer protection…” and urged ALI members to reject the draft. Senator Elizabeth Warren (D-MA), who initially voiced concern about the proposal in 2017, called it “dangerous” in a tweet last week, according to The Verge. Reuters reported that business groups also slammed the draft for “creating new common law rather than restating existing law.”

But, as MacDougall points out, the three law professors who authored the proposal “counter that they have simply summarized trends in American law.” This assertion is in line with ALI’s characterization of Restatements as publications that aim to “reflect the law as it presently stands or might appropriately be stated by a court.” The authors published a response to the State AGs letter, claiming that criticism was based on a misunderstanding of the rules in the draft Restatement. An ALI advisory council member also published a defense, stating that the authors, who are leaders in the subject, have “faithfully followed and implemented the traditional ALI process.”

The draft was debated for hours during the Annual Meeting last week, and members ran out of time to address all sections of the restatement or to take a final vote. The draft is set to be reviewed at a subsequent Annual Meeting, and the debate is sure to continue. In the meantime, if you’re interested in any of ALI’s published Restatements, you can learn more about them and how to access them through Jenkins using our research guides on the Restatements.