Information Rights and Obligations

A Challenge for Party Autonomy and Transactional Fairness

André Janssen, Geraint Howells, Geraint Howells

• Publisher: Routledge
• Year: 2017
• ISBN:
  9781351927581
• Edition: 1
• Topic: Derecho
• Subtopic: Derecho del consumo

Information requirements have become a key element of consumer policy at the European level and are also gaining increasing importance in all other areas of private law. The law stipulates that information provided should not be misleading and also involves requirements regarding the fairness and objectivity of what has been provided. In addition to controlling the veracity of what is voluntarily offered by traders, the law increasingly requires disclosure of certain information. This volume focuses especially on the question of how these information requirements influence the party autonomy. International contributors explore in various contexts whether the legislative policy regarding the information requirements and their relationship to party autonomy has been properly thought through.

Chapter 1

Autonomy and Fairness: The Case of Public Statements

Chris Willett

Introduction

In this chapter I consider what we mean when we refer to ‘autonomy’ in the context of regulating relationships between traders and consumers; and how this relates to freedom of contract thinking and more fairness-oriented thinking.¹ The basic argument made is that autonomy has a meaning that is in line with freedom of contract thinking; but that it has an alternative meaning, one that is more in line with fairness-oriented thinking. I try to explain what autonomy means when understood from a freedom of contract perspective; and how, from a freedom-oriented perspective, autonomy is thought to be best realized in various contexts. I also try to explain what autonomy means when understood from a fairness-oriented perspective; and how, from a fairness-oriented perspective, autonomy is thought to be best realized in these contexts. The discussion then focuses more specifically on autonomy, freedom and fairness in the context of public and advertising statements made by traders to induce consumers to enter contracts.

Basically, the argument is that freedom-oriented autonomy is about maximizing the self-reliant freedom of the parties in relation to who they contract with and on what terms. This involves strong adherence to the intention of the parties. Basing both obligation and liability on the intention of the parties is viewed as guaranteeing respect for party autonomy and respect for the expectations of the parties. In contrast, a fairness-oriented approach to autonomy is less concerned with the pursuit of a self-reliant version of freedom. It is also less concerned with the intention of the parties. More attention is given to the distinctive interests and expectations that a party such as a consumer is likely to have when entering relationships. Obligations and liabilities should be determined more by reference to these distinctive interests and expectations. Fairness-oriented autonomy may be better secured by determining obligations and liabilities by reference to these distinctive interests and expectations than by reference to self-reliance and intention.

In the context of public and advertising statements the law has traditionally taken a more freedom-oriented approach to autonomy by focussing on the intention of the parties. However, recent rules on public and advertising statements seem to be more fairness-oriented and to pay more heed to the distinctive interests and expectations of consumers. As a consequence of this, fairness-oriented consumer autonomy is better achieved.

However, measures such as these (which seek to instate a fairness-oriented version of autonomy for the benefit of the consumer) inevitably restrict the autonomy of the traders with whom consumers deal. Refusing to base obligation and liability on the intention of traders means a restriction on the autonomy of traders. However, there may be choices available in relation to which traders should suffer the restrictions (or at least the greatest restrictions) on autonomy, for the benefit of consumers. If this is the case, and if there is an agenda to maintain trader autonomy where possible, then it is argued that the rules might seek to impose the restrictions on autonomy on those traders who are in the best position to find alternative means of exercising autonomy. In the case of trader liability for public and advertising statements there do appear to be choices in terms of which traders should bear the brunt of the autonomy restrictions. There is a choice as to the relative burdens to be borne by retailers and producers. It is argued that (at least where producer advertising statements are concerned) producers are in the best position to retain a degree of autonomy by alternative means, i.e. by exercising quality control over the advertising statements generated. There may, therefore, be some justification for developing the legal rules in such a way as to shift as much of the burden as possible away from retailers and towards producers.

Autonomy and Expectation

What do we mean, in general, when we refer to parties having autonomy or being autonomous in the context of a contractual relationship?² It seems that we are referring to control or influence. Contractors surely have autonomy, when they have control or influence over their actions in relation to the formation, contents and performance of a contract.

What about expectation?³ Expectations seem to represent a perception as to whom one is entering a relationship with, and what one anticipates having to give to, and what one will get from, a relationship. So expectations are a conglomerate of the performance one imagines will be expected of oneself; who will expect such a performance; the burdens involved in providing this performance; the performance that can be expected of the other party; the benefits hoped to be derived from this performance; and what will happen if one party does not perform as expected.

There is, therefore, a close relationship between autonomy and expectation. A party exercises autonomy in deciding who to contract with; on what terms to contract; and how to behave in the course of performance. Making decisions on these matters will be influenced by the expectations that a party has as to who he is entering a relationship with and what he owes and is owed by virtue of being in this relationship.

The law cannot be neutral in a moral sense in matters relating to the balance of interests between parties to a contract.⁴ The law must decide what expectations to enforce. To the extent that the law is concerned to promote autonomy, the law must also decide upon the degree of control or influence that is to be required before it is said that a party has exercised autonomy. The law must decide when a party should be able to claim that the degree of control or influence that he possessed is insufficient for him to have made an autonomous decision. In so deciding the law will have to choose what relevance information should have. When, if ever, should a lack of information mean that the party did not have sufficient control or influence over his decision so that it can be said that an autonomous decision was not made? Then there is the situation where positive information has been provided, has raised expectations, but is incorrect (whether these are expectations as to what one will get or who one will get it from). When, if ever, should it be said that this undermines the control or influence (and therefore the autonomy) of the recipient of the information? In making these various choices the law may discover that the parties have different expectations and that the type of autonomy that is valued by the parties is different. So, a trader may expect obligation and liability to be based upon intention, as this involves maximization of his (self reliant) control or influence (autonomy) in relation to who he is bound to and on what terms. By contrast, consumer expectations as to what they will get, and from whom, may be influenced by factors that go beyond what the traders in question intended. If expectations have been raised by information that is incorrect then the view may be that a truly autonomous decision has not been made.

Autonomy, Expectation, Freedom and Fairness

As I have suggested both autonomy and expectation are very open textured and indeterminate concepts. For example, I have argued that autonomy is about control or influence over decisions. So, a consumer might be said to be acting autonomously when entering a contract with imperfect information – the consumer still acts autonomously in the sense that a free choice is made to take the risk that the information may be imperfect. On the other hand it might be said that a consumer only has a real chance of acting autonomously where he is in a position to make a more fully informed decision.⁵

Then we turn to expectations. It might be said that the expectations of the consumer should be determined by the formal terms of the contract. The formal terms are what the trader has agreed to; and they should determine what the consumer expects to get from the contract. In contrast, it could be argued that consumer expectations are (quite legitimately) formed by a much broader set of signals, including those coming in the form of advertising statements.⁶ These signals must be taken into account in determining the reasonable expectations of the consumer; and the accuracy of these signals play a role in determining whether the consumer has had the chance to make a fully autonomous decision.

We can only engage in meaningful debate as to these concepts, and how they translate into concrete legal rules, once we have recognized that different types of autonomy and expectation are possible; that these different types of autonomy and expectation are based on different underlying philosophies of contract; and then gone on to work out which versions of autonomy and expectation seem to be in evidence in the context of the rules under consideration.

It seems that both autonomy and expectation take on particular types of meaning when viewed from a perspective that is more oriented to traditional freedom of contract values. Autonomy and expectation take on different meanings when viewed from a perspective that is more oriented to fairness values. From a classical freedom-oriented perspective autonomy is achieved by maximizing the (essentially self-reliant) freedom of the parties in relation to what is contracted for and with whom (if anyone) a contract is made. On this approach the autonomy of both parties is maximized by basing their obligations and liabilities on what they intended (or appeared to intend) to promise and who they intended (or appeared to intend) to make these promises to.

This connects with expectation. The expectations of a party as to what is being promised (and by whom) are viewed as being fixed by what the other party appears to have intended to promise, and who he appears to have made these promises to. So, for example, a consumer cannot expect that a trader will be liable except to the extent that the trader appears to have intended to promise to be bound. If a trader appears to intend to be bound to obligation ‘X’, but not to obligation ‘Y’ then the consumer cannot legitimately expect the trader to be bound to obligation ‘Y’. In addition, if a trader appears not to intend to be bound to the consumer at all, then the consumer cannot legitimately expect the trader to be bound. The trader may send out inaccurate signals. However, if the trader does not appear to intend to be bound by these signals the inaccuracy will not be viewed as being a significant compromise of the autonomy of the consumer.

Then we turn to the role of vitiating factors. From a freedom-oriented perspective, once we have established what the parties appear to have intended to commit to, the intention to promise is only likely to be viewed as not genuinely autonomous where it has been induced by fairly extreme vitiating factors blatantly undermining the ability to make an autonomous decision. This preserves a high degree of (self reliant) autonomy for the parties. A party is free to make commitments except where his free agency has been seriously undermined by force or misinformation. A party is also free to use as broad a range of tactics as possible in order to secure the commitment of the other party; his freedom to do so only being restricted where he has been guilty of using blatantly exploitative tactics.

However, from a fairness-oriented perspective both autonomy and reasonable expectation must be read in light of the need to take account of distinctive consumer needs, perspectives and interests. This means recognizing a number of points. The first point is that consumers are likely to have less information than traders about products and services and the terms on which they are sold.⁷ Secondly, consumers are likely to be placing a strong degree of reliance on advertising and marketing signals. These are much more transparent to the consumer than are the formal terms.⁸ In addition, consumers are fairly infrequent purchasers of major items (at least by comparison with traders). As such, their expectations are less likely than many business contractors to have been shaped by experiences of ‘problem’ transactions and the way in which these are resolved.⁹ In most cases their purchases will have been relatively trouble free. As such, their experience is of products and services that are value for money and live up to the promises made about them in advertising and marketing. It might, then, be said to be hardly surprising that a strong degree of reliance should be placed on these signals by comparison with the formal terms. A third point, relating specifically to substantive consumer interests, is that consumers buy products and services for use in the private sphere of life. If they do not live up to expectations there is a potentially serious impact upon the private sphere of life; rather than simply on the profitability of a firm. When cars, washing machines or televisions do not work according to what is normal or what was promised, there is a real impact on the private sphere of life, family etc.¹⁰ There may also be less scope than that possessed by a trader to absorb the losses that result from such problems.¹¹

This sort of analysis then leads a fairness-oriented perspective to view autonomy and expectation in particular ways; ways that are different from the way in which autonomy and expectation are viewed from a freedom-oriented perspective. This may involve the adoption of positive (or more indirect) transparency requirements. The consumer is then viewed as being in a more realistic position to exercise autonomy, through better informed consent.¹² It may invol...