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In practice, consumer protection laws are designed to protect both the consumer and the business against fraud and unfair competition. However, the proposed one-way contract favors the business against contractual liabilities leaving out the customer. The purpose of this article is to investigate the regime of one-way contracts between the customer and the business, which binds the consumers to the business and not the other way (Ben-Shahar, 2012). The study has revealed that existing contracts are disguised as one and not two-way contracts (Harris Jr, 2006). Redesigning the consumer protection laws for better contracts is possible.
Ben-Shahar (2010) provides a detailed review of one-way contracts that are enforceable against the customer and not the business. Ben-Shahar (2010) notes that consumer-to business contracts are characteristically designed with bad pro-business and difficult to enforce and expensive pro-consumer terms. The existing gaps eventually end up as deterrence to criminal law. Consumer Protection Acts (CPA) do not guarantee direct compensation to consumers but guarantee a significant level of protection through private attorneys.
CPAs have proved to be effective as well as being the source of diverse and frivolous suits. Perceptions of one-way contracts that are enforceable by one party emerge. Ben-Shahar (2010) argues that consumer-oriented contract remedies do not apply in this case, but a business can resort to legal remedies if the customer fails to honor the contract. Consumer-oriented contracts allow both parties to rewrite and redesign the laws and terms of engagement between them.
Ben-Shahar (2010) accurately depicts a situation where businesses are not subject to legal liabilities when a breach of contract between the customer and the business occurs. A one-way contract enforceable only against the consumers defines the paradigm which Ben-Shahar (2010) proposes to be a better way of protecting the customers. According to Ben-Shahar and Logue (2012), the traditional reasons for establishing a binding contract between the customer and the business are to protect both parties.
However, Wang (2008) notes that disputes arise if businesses craft contracts that fail to account for the rights because they lack legal backing. According to Wright (2012), contract laws are designed to protect consumers based on a fair relationship between both contracting both parties. Wright (2012) provides the basic definition of fair treatment from the perspective of the areas of marketing such as product policy, pricing, marketing communication, distribution, and privacy issues.
Wright (2012) argues that traditional contracts are designed to ensure consumer protection due to product flaws such as hidden defects, excessive pricing, consumer irrationality, standardization, safety issues, and negative externalities. This is a widely accepted and applied approach to consumer protection based on the general principles of consumer protections established under the law in many countries including the USA and China (Harris Jr, 2006).
However, Ben-Shahar and Logue (2012) dismiss the veracity argument on the consumer protection law by asserting that laws fail because of inherent weaknesses that enable businesses to exploit customers and evade liability. However, the discourse fails to show how emphasis can be placed on consumer-oriented contract remedies, which in practice can be achieved by invoking criminal or tort laws to protect the consumer. Here, the critical aspect is to distinctly define the points of demarcation between the customer and the business to enforce a state of fairness.
Ben-Shahar, O., & Logue, K. D. (2012). Outsourcing Regulation: How Insurance Reduces Moral Hazard. Michigan Law Review, 1(1), 197-248.
Ben-Shahar, O. (2010). One-Way Contracts: Consumer Protection without Law. European Review of Contract Law, 6(3), 221-249.
Harris Jr, H. S. (2006). Making of an Antitrust Law: The Pending Anti-Monopoly Law of the People’s Republic of China, The. Chi. J. Int’l L., 7 (1), 169.
Wang, X. (2008). Highlights of China’s new anti-monopoly law. Antitrust Law Journal, 75(1), 133-150.
Wright, J. D. (2012). The Antitrust/Consumer Protection Paradox: Two Policies at War with Each Other. Yale Law Journal, Forthcoming, 1(1), 12-45.