The Law On Fine Print

Perhaps the most interesting conclusion the court made about Broder’s charges involved a literal discussion of the term small print. Some of MBNA’s contract language about how it would allocate payments was—literally—in small print. And New York had a law about jamming weasel words in tiny type. The court cited state law which said:

Contracts in small print

The portion of any printed contract or agreement involving a consumer transaction ...where the print is not clear and legible or is less than eight points in depth or five and one-half points in depth for upper case type may not be received in evidence in any trial, hearing or proceeding on behalf of the party who printed or prepared such contract or agreement, or who caused said agreement or contract to be printed or prepared. …No provision of any contract or agreement waiving the provisions of this section shall be effective.

Although the statute referred to evidence admissibility in trials, its purpose was to make such contract provisions unenforceable. The relevant language about payment allocation contained in the MBNA’s solicitations was smaller than the required eight-point type.

The court also allowed the deceptive practices claim to go forward; but it did throw out the fraud charge essentially for being redundant to the others.

And the court certified Broder’s lawsuit for class action status. Anyone who’d taken a cash advance or transferred a balance from MBNA during the same period could join him. The ruling was a substantial loss for MBNA, which promptly began negotiating a settlement with Broder.

Next: Guard Against ID Theft