Does Anyone Read the Fine Print? Consumer Attention to Standard-Form Contracts

A cornerstone of the law and economics approach to standard-form contracts is the informed-minority hypothesis: in competitive markets, a minority of term-conscious buyers is sufficient to discipline sellers from using unfavorable boilerplate terms. This argument is often invoked to limit intervention or regulate consumer transactions, but there has been little empirical investigation of its validity. We track the Internet browsing behavior of 48,154 monthly visitors to the Web sites of 90 online software companies to study the extent to which potential buyers access the end-user license agreement. We find that only one or two of every 1,000 retail software shoppers access the license agreement and that most of those who do access it read no more than a small portion. Since the cost of comparison shopping online is so low, the limiting factor in becoming informed thus seems not to be the cost of accessing license terms but reading and comprehending them.