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The Right to Withdraw in Contract Law

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  • Omri Ben-Shahar
  • Eric A. Posner

Abstract

European law gives consumers the right to withdraw from a range of contracts for goods and services; American law, with narrow exceptions, does not. Yet merchants in the United States frequently provide by contract that consumers have the right to return goods. We analyze the right to withdraw in a model that incorporates a trade-off between allowing consumers to learn about goods that they purchase and protecting sellers from the depreciation of those goods. The right to withdraw--at least, as a default rule--has a plausible economic basis. We identify a nascent version of it in the well-known, controversial case of ProCD v. Zeidenberg.

Suggested Citation

  • Omri Ben-Shahar & Eric A. Posner, 2011. "The Right to Withdraw in Contract Law," The Journal of Legal Studies, University of Chicago Press, vol. 40(1), pages 115-148.
    • Handle: RePEc:ucp:jlstud:doi:10.1086/658403
    DOI: 10.1086/658403
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    References listed on IDEAS

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    Cited by:

    1. J. Luzak, 2014. "To Withdraw Or Not To Withdraw? Evaluation of the Mandatory Right of Withdrawal in Consumer Distance Selling Contracts Taking Into Account Its Behavioural Effects on Consumers," Journal of Consumer Policy, Springer, vol. 37(1), pages 91-111, March.
    2. Keith N. Hylton, 2012. "The Economics of Necessity," The Journal of Legal Studies, University of Chicago Press, vol. 41(2), pages 269-289.
    3. Ranftl, Simone & Lurger, Brigitta & Brohmer, Hilmar & Athenstaedt, Ursula, 2022. "The Consumer Option Model for Withdrawal Rights in the EU: Analysis of an Alternative Design," American Journal of Trade and Policy, Asian Business Consortium, vol. 9(1), pages 23-42.
    4. Karampatzos Antonios & Ilić Nikola, 2023. "Law and Economics of the Withdrawal Right in EU Consumer Law," Review of Law & Economics, De Gruyter, vol. 19(3), pages 435-452, November.
    5. Difrancesco, Rita Maria & Huchzermeier, Arnd & Schröder, David, 2018. "Optimizing the return window for online fashion retailers with closed-loop refurbishment," Omega, Elsevier, vol. 78(C), pages 205-221.
    6. Sven Hoeppner, 2014. "The unintended consequence of doorstep consumer protection: surprise, reciprocation, and consistency," European Journal of Law and Economics, Springer, vol. 38(2), pages 247-276, October.
    7. Courtenay Atwell, 2015. "The Franchisee as a Consumer: Determining the Optimal Duration of Pre-Contractual Disclosure," Journal of Consumer Policy, Springer, vol. 38(4), pages 457-489, December.

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