Contracting in the Age of the Internet of Things: Article 2 of the UCC and Beyond
This Article analyzes the global phenomenon of the Internet of Things (“IOT”) and its potential impact on consumer contracts for the sale of goods. Recent examples of IOT products include Amazon’s Dash Replenishment Service, which allows household devices to automatically reorder goods. By 2025, the IOT is estimated to have an economic impact of as much as $11.1 trillion. To date, there are approximately fifteen billion interconnected devices, and by 2020, there will be fifty billion such devices worldwide. IOT devices will revolutionize the way that consumers shop for consumable supplies and other goods. Consumers will no longer need to log on to a company’s website or use a mobile application to purchase goods but will be able to conclude contracts for the sale of goods by using IOT devices. This Article contends that the legion of IOT data expected to be generated about consumers and their preferences will worsen preexisting information asymmetry in consumer contracts to the benefit of companies; increase the lack of proximity between consumers and the contract formation process; further encourage consumers’ failure to read and understand contract terms prior to contracting; and likely lead businesses to further take advantage of consumer ignorance and apathy by including onesided contract terms, such as unilateral amendment provisions and terms that restrict consumer access to judicial process. Common law agency principles, e-commerce statutes, contract law, and Article 2 of the Uniform Commercial Code (“Article 2”) are unlikely to effectively address these concerns. This Article suggests important amendments to Article 2 and argues that courts should adjust their application of existing contract law and agency principles to account for the new automatic and interface-free contracting environment that the age of the IOT will herald.