2 See, e.g., U.C.C. § 3-316(2) (a merchant disclaiming the implied warranty of merchantability must do so conspicuously). Rent-to-own transactions are another example. Despite effective interest rates exceeding 200% annually, nearly all state legislatures permit rent-to-own sales under laws that require the disclosure of certain contract terms. See, e.g., Ind. Code § 24-7-1 to -9 (2006).Google Scholar

3 Examples would include usury laws that cap interest rates and laws that prohibit confession of judgment clauses in consumer credit transactions.Google Scholar

4 Directive on Unfair Contract Terms, Council Directive 93/13 EEC, 1993 O.J. L95/29.Google Scholar

5 Directive 2005/29/EC concerning unfair business-to-consumer commercial practices in the internal market, O.J. 2005 L149/22 (hereinafter, the “Directive” or “Directive on Unfair Commercial Practices”).Google Scholar

6 See Randy E. Barnett, Perspectives on Contract Law 346 (1995) (“A fundamental tenet of the liberal conception of justice is that resources rightfully belonging to another may not be taken without the manifested consent of the rights-holder.”); John Rawls, A Theory of Justice 342–47 (1971).Google Scholar

7 See Lawrence Kalevitch, Gaps in Contracts: A Critique of Consent Theory, 54 Mont. L. Rev. 169 (1993); William W. Bratton, Jr., The “Nexus of Contracts” Corporation: A Critical Appraisal, 74 Cornell L. Rev. 407, 458–59 (1989) (“Contract law literature contains commentary effectively challenging classical contract's conjunction of contract, consent, and freedom.”); Duncan Kennedy, The Stages of the Decline of the Public/Private Distinction, 130 U. Pa. L. Rev. 1349, 1351–52 (1982) (“The ‘free’ ‘private’ market is really an artifact of public violence.”); Betty Mensch, Freedom of Contract as Ideology, 33 Stan. L. Rev. 753, 764 (1981) (“Coercion, including legal coercion, lies at the heart of every bargain. Coercion is inherent in each party's legally protected threat to withhold what is owned. The right to withhold creates the right to force submission to one's own terms.”).Google Scholar

8 In the early 1990s, Norbert Reich and others labeled this disclosure-based form of consumer protection a pre-interventionist approach to the defective consent problem. See Norbert Reich, Diverse Approaches to Consumer Protection Philosophy, 14 J. Cons. Pol. 257 (1992) (observing possible exceptions in Spain and Brazil); J. Goldring, Consumer Law and Legal Theory: Reflections of a Common Lawyer, in Essays on Comparative Commercial and Consumer Law 316, 326–27 (D. King, ed., 1992).Google Scholar

9 See Margaret J. Radin, Humans, Computers, and Binding Commitment, 75 Ind. L.J. 1125 (2000); Maureen A. O'Rourke, Progressing Towards a Uniform Commercial Code for Electronic Commerce or Racing Towards Nonuniformity?, 14 Berkeley Tech. L.J. 635, 648 (1999).Google Scholar

10 See Russell Krobokin, Bounded Rationality, Standard Form Contracts, and Unconscionability, 70 U. Chi. L. Rev. 1203. 1206, 1210–11 (2003); Richard Craswell, Passing on the Costs of Legal Rules: Efficiency and Distribution in Buyer-Seller Relationships, 43 Stan. L. Rev. 361, 363 (1991).Google Scholar

11 86 F.3d 1447, 1453 (7^th Cir. 1996).Google Scholar

12 Thierry Bourgoignie, Elements for a Theory of Consumer Law, in Essays on Comparative Commercial and Consumer Law 277, 285–86 (D. King, ed., 1992).Google Scholar

13 Examples are found in virtually all fields: employment (e.g., exceptions to employment at will, numerous anti-discrimination laws, and mandatory accommodations for workers with disabilities), insurance (e.g., state-imposed insurance terms), competition (e.g., restrictions on anti-competitive mergers and product tie-ins), landlord-tenant (e.g., court- or legislature-imposed habitability requirements, anti-discrimination laws, eviction procedures), to name a few.Google Scholar

14 Debates about regulating the subprime lending market are a recent example. In some states, disclosure of subprime lending fees and corresponding annual percentage rates is regarded as sufficient to protect societal interests. In others, caps on fees or outright prohibition of certain lending practices, such as “payday” loans, have been legislated. See Secured Consumer Credit and the Fringe Banking Industry, in Secured Transactions Under the Uniform Commercial Code, ch. 20A (J.B. McDonnell, ed. 2005) (discussing state and federal laws governing traditional pawns, automobile title pawns, “payday” loans, tax refund anticipation loans, and rent-to-own transactions).Google Scholar

15 Beginning in the 1960s and continuing through subsequent decades, the governments of Europe and North America enacted numerous laws that recognized the inadequacy of market mechanisms, competition and freedom of contract to protect consumer interests. For an insightful comparison of the effects of federalism on the development of consumer law in Europe and the United States, see Thierry Bourgoingnie & David Trubek, Consumer Law, Consumer Markets and Federalism in Europe and the United States (1987). In less developed countries, the most necessary consumer laws are likely to be those ensuring the safety of foods and health products, not laws mandating information disclosures and other market-regulating devices. Hans B. Thorelli, Consumer Policy in Developing Countries, in 29th Annual Meeting of the American Council on Consumer Interests 149 (Karen P. Goebel, ed., 1983).Google Scholar

16 Unfair Commercial Practices Directive, Annex I (“Commercial Practices Which Are in All Circumstances Considered Unfair”).Google Scholar

17 Some form of the Uniform Deceptive Sales Practices Act, which contains a list of prohibited practices, has been enacted in many states. See, e.g., 815 Ill. Comp. Stat. § 510, 510/2 (2006).Google Scholar

18 Unfair Commercial Practices Directive, Article 6.1.Google Scholar

19 Unfair Commercial Practices Directive, Article 7.1.Google Scholar

20 15 U.S.C. § 45 (2006). See F.T.C. v. Pantron I Corp., 33 F. 3d 1088, 1095 (9^th Cir. 1994)(a material representation or omission is deceptive if it is likely to mislead a consumer acting reasonably under the circumstances).Google Scholar

21 See, e.g., State ex rel. McLeod v. C & L Corp., 280 S.C. 519, 525, 313 S.E.2d 334, 338 (1983).Google Scholar

22 Unfair Commercial Practices Directive, Article 8.Google Scholar

23 For example, sale of financial information obtained through pretexting, F.T.C. v. Rapp., No. 99-WM-783, 1999 F.T.C. LEXIS 112 (D. Colo. filed Apr. 12, 1999) (stipulated consent agreement and final order entered June 23, 2000) (Touch Tone); use of information obtained in violation of a competitor's privacy policy to spam consumers, F.T.C. v. ReverseAuction.com, Inc., No. 00-0032 (D.D.C. filed Jan. 6, 2000) (available at http://www.ftc.gov/os/2000/01/reverseconsent.htm); and charging consumers for non-existent Internet services, F.T.C. v. J.K. Publications, 99 F. Supp. 2d 1176 (C.D. Ca. 2000).Google Scholar

24 Unfair Commercial Practices Directive, Article 5.2(a) and (b).Google Scholar

25 Unfair Commercial Practices Directive, Article 2(h).Google Scholar

26 Unfair Commercial Practices Directive, Article 2(e).Google Scholar

27 European Fair Trading Law, ch. 4.Google Scholar

28 European Fair Trading Law at 220.Google Scholar

29 See, e.g., Palmisani v. INPS, Case C-261/95, 1 E.C.R. 4025 (1997).Google Scholar

30 Unfair Commercial Practices Directive, Articles 11, 12, and 13.Google Scholar

31 Unfair Commercial Practices Directive, Article 11(1).Google Scholar

32 European Fair Trading Law at 223–25.Google Scholar

33 European Fair Trading Law at 222.Google Scholar

34 European Fair Trading Law at 28–29, 35.Google Scholar

35 Unfair Commercial Practices Directive, Article 4, which states, “Member States shall neither restrict the freedom to provide services nor restrict the free movement of goods for reasons falling within the field approximated by this Directive.” Although this language is rather obtuse to readers unfamiliar with EU drafting conventions, it means that Member States cannot create laws on unfair trade practices that restrict commercial activity more than the Directive does.Google Scholar

36 See National Consumer Council, United Kingdom, Unfair Commercial Practices: Response to DTI Consultation on the Draft EU Directive (2003); European Consumer Law Group, The Proposed Directive on Unfair Commercial Practices (2004).Google Scholar

37 European Fair Trading Law at 35. The Directive does provide for a transition period, however, in which Member States may apply more restrictive laws through June 12, 2013, if certain conditions are met. Unfair Commercial Practices Directive, Article 3(5).Google Scholar

38 European Fair Trading Law at 100–01.Google Scholar

39 European Fair Trading Law at 111.Google Scholar

40 Unfair Commercial Practices Directive, Recital 18. This has been an issue in the United States as well. The Directive's focus on the “average” consumer may not be materially different from the standard that the FTC uses, banning misleading practices only if they are likely to mislead consumers “acting reasonably under the circumstances.” F.T.C. v. Pantron I Corp., 33 F. 3d 1088, 1095 (9^th Cir. 1994).Google Scholar

41 Recital 18 also states, “Where a commercial practice is specifically aimed at a particular group of consumers, such as children, it is desirable that the impact of the commercial practice be assessed from the perspective of the average member of that group.” While this language does allow Member States to protect vulnerable and credulous consumers, it does so only if the marketing is directed at that subgroup, and not at the public at large. Unfair Commercial Practices Directive, Recital 18.Google Scholar

42 European Fair Trading Law at 31–36.Google Scholar

43 Article 3(4), Directive 2001/95/EC on general product safety, O.J. 2002 L11/4.Google Scholar

44 Article 3(4), Directive 2003/31/EC on certain aspects of information society services, in particular electronic commerce, in the Internal Market, 2000 O.J. L178/1.Google Scholar

45 Unfair Commercial Practices Directive, Article 5.2(a) and (b).Google Scholar

46 European Fair Trading Law at 3.Google Scholar

47 Reiner Schulze and Hans Schulte-Nolke, Analysis of National Fairness Laws Aimed at Protecting Consumers in Relation to Commercial Practices, at 12, available at: <http://europa.eu.int/comm/consumers/cons_int/safe_shop/fair_bus_pract/green_pap_comm/studies/unfair_practices_en.pdf>..>Google Scholar

48 European Fair Trading Law at 3.Google Scholar

49 European Fair Trading Law at 242–44, 248–49.Google Scholar

50 European Fair Trading Law at 254.Google Scholar

51 European Fair Trading Law at 255. Christian Twigg-Flenser, Deborah Parry, Geraint Howells & Annette Nordhausen, An Analysis of the Application and Scope of the UCP Directive (2005), available at: <http://www.dti.gov.uk/ccp/consultpdf/final_reportl80505.pdf>..>Google Scholar