The law of contracts is one of the most important ways that privacy is
protected in the commercial context.
For many sensitive transactions, some kind of privacy is often
an implied contract term. This is the case when it is well
understood in that business that information will be kept private.
Other contracts may be formed with explicit terms that protect — or
do not protect — privacy. The parties to the contract are free to decide
the privacy levels that are suitable for themselves. Businesses that post
privacy policies on their websites or in documents they issue are making
promises that become part of the contracts they enter into with consumers.
Thanks to the law of contracts, consumers have many choices. They may
refuse to deal with businesses that do not have satisfactory privacy policies. They may
attempt to bargain individually with businesses over the privacy of information.
Or they may be perfectly indifferent, in which case the terms put forward
by the business, or generally understood terms will govern. All these options are
possibilities under contract law.
Contract law is very flexible and responsive to the privacy needs of society
generally, and to the needs of individuals. It allows each individual consumer
to seek out the level of privacy that he or she desires. Rather than trying
to dictate the privacy terms in contracts, governments should be limited to
enforcing the contract terms that consumers choose. This allows consumers to
protect their information if they want, and reap the benefits of sharing their
information if they want.
Links:
Amazon.com Puts Consumers in Control by Jessica Melugin,
Competitive Enterprise Institute (September 25, 2000)
Privacy
Precepts Learned the Hard Way by Jessica Melugin, Competitive Enterprise
Institute (August 23, 2000)
Complaint in Aquacool_2000 v. Yahoo! (sounding largely
in contract) (May 2000)
Opinion and Order in Jessup-Morgan v. AOL, No. 98-70676
(E.D. Mich; July 23, 1998) (dismissing contract privacy claims in light of
plaintiff's prior breach)
Comments? comments@privacilla.org
(Subject: Contracts)
[updated 04/18/02]
