Individual Negotiation of Warranty Disclaimers: An Economic Analysis of an Assumedly Market Enhancing Rule
In this Article, we will examine the economic forces that shape the typical contract for the sale of goods to determine whether Berg's requirements of explicit negotiation and specific disclosure are justified, and if not, whether the Berg rules should be modified or abolished. In particular, we will examine how buyers and sellers determine the terms of the contracts they enter. Most importantly, we will consider the common assertion that consumers have no ability to bargain and therefore have no influence on what terms merchants and manufacturers include in their standard contracts. We will also consider whether merchants systematically frustrate consumers' preferences regarding contract terms, or whether, instead, merchants are driven by market forces to satisfy those preferences at either competitive or monopolistic prices. We will conclude by suggesting that the Berg rules are ineffective, or at best unnecessary, in furthering the consumer protection goals announced by the court itself.
Thomas J. Holdych and George Ferrell, Individual Negotiation of Warranty Disclaimers: An Economic Analysis of an Assumedly Market Enhancing Rule, 13 SEATTLE U. L. REV. 237 (1990).