1. At least on first reading, I don't disagree with anything in your analysis responding to my own; in particular, your mail-order catalog analogy seems quite apt.
2. You're correct that the risk-management precautions to which you refer have costs associated with them. Within limits worked out over decades in legislatures and courts, the law allows companies to use contracts to reduce such costs by shifting the associated risks to others.
When a company has sufficient bargaining power, its management typically attempts to do just that: Use standard-form contracts to shift risks to others, and thus reduce the company's costs.
(I spend some of my time helping to negotiate such contracts. As you might imagine, the standard-form contract of a powerful customer will usually be very different from that of a supplier.)
At the risk of belaboring the obvious, this is the same principle that's behind self-service gasoline pumps and self-service checkout lines in grocery stores: The more of a company's costs that the company can get its customers (or its suppliers) to take on, the higher the company's margins will be for the same amount of revenue. Not least, companies' managements are motivated to do this because eventually a company's aggregate costs will necessarily be reflected in the price, and thus the competitiveness, of the company's products and services.
(The costs of a company whose stock is publicly traded will also be reflected eventually in the price of the company's stock. That's generally high on the list of management concerns as well.)
3. The question you seem to pose is whether we should simply forbid contracting parties from contractually shifting risk as described in #2. Various state- and federal laws already do that to a certain extent; see, for example, consumer-protection laws, as well as article 2 of the Uniform Commercial Code (which in most states governs the sale of goods), not to mention employee-protection laws.
Whether a given jurisdiction should attempt go even further in that direction is a question that comes up every so often. One example is the recent controversy over the U.S. Supreme Court's 5-4 decision that companies can legally include mandatory arbitration provisions in their consumer contracts, thereby largely eliminating the possibility of class-action lawsuits and thus considerably reducing consumers' leverage [1].
Whenever the issue does come up, representatives of various affected interests converge from all directions --- including but not limited to so-called consumer lawyers eager to gain, or preserve, sources of contingent fees and/or statutory attorneys' fees awards.
Ultimately the issue boils down to a political question: What should or should not the law be? As with so many such questions these days, the deep ideological divisions among the American people often result in no change to the status quo.
1. At least on first reading, I don't disagree with anything in your analysis responding to my own; in particular, your mail-order catalog analogy seems quite apt.
2. You're correct that the risk-management precautions to which you refer have costs associated with them. Within limits worked out over decades in legislatures and courts, the law allows companies to use contracts to reduce such costs by shifting the associated risks to others.
When a company has sufficient bargaining power, its management typically attempts to do just that: Use standard-form contracts to shift risks to others, and thus reduce the company's costs.
(I spend some of my time helping to negotiate such contracts. As you might imagine, the standard-form contract of a powerful customer will usually be very different from that of a supplier.)
At the risk of belaboring the obvious, this is the same principle that's behind self-service gasoline pumps and self-service checkout lines in grocery stores: The more of a company's costs that the company can get its customers (or its suppliers) to take on, the higher the company's margins will be for the same amount of revenue. Not least, companies' managements are motivated to do this because eventually a company's aggregate costs will necessarily be reflected in the price, and thus the competitiveness, of the company's products and services.
(The costs of a company whose stock is publicly traded will also be reflected eventually in the price of the company's stock. That's generally high on the list of management concerns as well.)
3. The question you seem to pose is whether we should simply forbid contracting parties from contractually shifting risk as described in #2. Various state- and federal laws already do that to a certain extent; see, for example, consumer-protection laws, as well as article 2 of the Uniform Commercial Code (which in most states governs the sale of goods), not to mention employee-protection laws.
Whether a given jurisdiction should attempt go even further in that direction is a question that comes up every so often. One example is the recent controversy over the U.S. Supreme Court's 5-4 decision that companies can legally include mandatory arbitration provisions in their consumer contracts, thereby largely eliminating the possibility of class-action lawsuits and thus considerably reducing consumers' leverage [1].
Whenever the issue does come up, representatives of various affected interests converge from all directions --- including but not limited to so-called consumer lawyers eager to gain, or preserve, sources of contingent fees and/or statutory attorneys' fees awards.
Ultimately the issue boils down to a political question: What should or should not the law be? As with so many such questions these days, the deep ideological divisions among the American people often result in no change to the status quo.
[1] http://en.wikipedia.org/wiki/AT%26T_Mobility_v._Concepcion