As the Internet, computer software and downloadable programs become ubiquitous, so does the use of electronic contracts. These are the boxes that pop up before a program’s installation is complete, containing paragraphs of text and an “I Accept” button.
“Most people just accept the terms and conditions of these contracts because if you don’t, you can’t use the program,” said Robert P. Bartlett III, an assistant professor in the School of Law. “This is a problem because customers are often surprised later to find out what they’ve agreed to.”
Bartlett, who has taught corporate finance and contracts since 2005, recently collaborated with Victoria Plaut, a social psychologist at UGA, to conduct an experiment that explored contract readership rates among UGA undergraduates.
“We found that the vast majority of the participants in our study-almost 90 percent-just clicked ‘I Accept’ without reading the terms of the online contract,” he said. “Most said they did this because they either didn’t understand the wording in the contract or they felt they couldn’t change the terms. So why read it?”
However, the study revealed that when students are presented contracts with a short summary or that allow them to change terms, such as a check box to pick how many devices they could synchronize with iTunes, they took the time to read through it, Bartlett said.
“Potentially, this research will encourage corporations to modify their contracts to make them more comprehensible and interactive, as both the company and the customer would benefit,” he said.
Before entering academia, Bartlett practiced law for four years and specialized in securities and finance. Recent economic developments have renewed his research interest in the use of debt securities in corporate finance.
“Debt financing can be good because it allows a company to grow and enhance shareholder returns,” he said. “However, the compensation of managers especially on Wall Street-often encourages the use of debt without consideration of its longer term risks.”
Bartlett plans to explore ways contracts can be structured to help companies better internalize the risks they are taking when they go into debt.
On being in the classroom, Bartlett said he enjoys watching the students progress as thinkers through their three years of law school.
Bartlett also is involved in developing a transactional law and ethics program, which will include more transactional skills-based courses.
“We want students to get a good foundation and direct exposure to different areas of transactional law to prepare them for the practice of law,” he said. “Being a lawyer is a fun and honorable thing to do. I think a lot of people forget that part.”