The American Law Institute’s launch of a project to create a “Restatement of the Law Third, Consumer Contracts” could have major consequences for providers of consumer financial services and other companies that contract with consumers. The project’s premise is that because ALI’s existing Restatement Second of Contracts generally takes a “one-size-fits-all” approach that does not distinguish between commercial and consumer contracts, it is inadequate, and a separate restatement of rules applicable to consumer contracts is needed.
On November 30, I attended the first meeting of the project’s advisers which was held at New York University’s School of Law. I am one of only two attorneys who represent industry who have been named advisers. Also attending the meeting was Meredith Fuchs, CFPB General Counsel, who has been named an adviser to the project. In addition, Gail Hillebrand, CFPB Associate Director for Consumer Education and Engagement, attended the meeting as a guest.
One of the project’s two reporters is Professor Oren Bar-Gill. Together with former law professor and now Senator-elect Elizabeth Warren, Professor Bar-Gill authored the law review article that provided the blueprint for the CFPB.
See our legal alert for more information on the project, including a list of some of the areas where the new restatement could significantly change how the legal system treats consumer contracts.