Contractual agreements often use capital letters (“ALL CAPS”) liberally to draw special attention to important parts of the text.
The idea is supposedly that consumers pay more attention to them by emphasizing these capitalized terms.
But as the authors of a new article on capital letters explain, the notion that these archaic technology improving consumer approval has never been confirmed.
Even today there is no empirical evidence for this.
So researchers Yonathan Arbel and Andrew Toler of the University of Alabama School of Law decided to put capital letters to the test.
In several experiments, they found no benefit in capitalizing blocks of text in a contract.
If anything, readers, particularly older readers, found text written in all caps to be harder to understand.
Her new work appeared in the Journal of Empirical Legal in November Studies.
The authors say it is the first “to empirically examine the effectiveness of capital letters”.
All caps: a bad idea with a long history
This lack of prior research on the contractual use of capitals is strange.
The practice is quite old and the stakes are high.
The belief in the benefits of capitalization dates back at least to the 19th century.
And even today, many courts, legislatures and authorities still insist that key contract terms be capitalized, ostensibly to protect consumers.
Courts, for example, often rule that All caps text is sufficiently prominent.
Even when important parts of a contract are not written in capital letters, courts often refuse to enforce them.
This practice has serious and far-reaching implications.
It affects contractual liability in areas such as arbitration agreements and consumer guarantees.
Thus, if capitalization does not actually “improve the validity of consent,” as the authors write , “then courts have erroneously onerous terms enforced” and “Consumers denied recourse for wrong assumptions.”
Capital letters more popular than ever
For this study, the authors collected standard contracts from 500 companies in the US, including Google , Facebook, Uber and Amazon.
They found that 77% of these contracts contained at least one clause in uppercase, suggesting the practice is still very much alive.
They also tested whether the uppercase formatting actually used helps people to understand or remember such contract clauses.
Using Amazon’s Mechanical Turk, they recruited a sample of 570 participants in the United States. About 45% of them were female, and their median age was 38.
Researchers instructed participants to read through a two-page, 15-paragraph contract.
They have modeled this document on Spotify’s End User Agreement. A version read by half of the participants contained a paragraph written in all caps.
The other half of the subjects read the same contract, except that this paragraph was in normal capitalization.
The researchers then tested how accurately participants answered questions about a term appearing in that paragraph.
Not a helpful effect at all
They found that all caps had no effect on improving readers’ understanding or memory. Instead, they found some evidence that capital letters actually reduce comprehension for older readers.
Participants over the age of 55 were 29% more likely to misunderstand their obligations when reading the contract with the paragraph capitalized.
In fact, “the older group got almost twice as many wrong answers as their control group peers” reading the same paragraph with normal formatting.
A small experiment also found that capital letters didn’t Offered advantages when the text had to be read very quickly.
Another test showed that an uppercase version of text was 22% more difficult to read and understand.
And a final experiment showed that reading paragraphs in capital letters took 13% longer without improving retention.
Why do capital letters fail?
Previous research has shown that uppercase formatting obscures the differences between letters because uppercase letters do not have ascenders and descenders.
This sameness makes the text difficult to read.
Cultural changes also play a role. Long ago capital letters meant grandeur and seriousness.
But in today’s Internet culture, the authors point out, “there is a growing convention that capital letters are similar in effect to screaming.”
This negative emotional association could make readers conscious or unconscious encourage them to ignore uppercase text.
Add to this the fact that Americans’ vocabulary is shrinking and it quickly becomes clear that many treaty texts are not read properly.
Dubious incentives around hide contractual liability
Although typical sales copy capitalizes a few words (BUY NOW!), entire paragraphs are rarely capitalized as contracts do.
In other words, when companies want to emphasize important features, they use a variety of design elements such as different colors, fonts and backgrounds.
These texts “have no resemblance to the texts they use to engage and bind consumers,” the authors write.
So why do companies continue to use capital letters in texts that which should ideally make contractual liability crystal clear?
Do you “really believe,” the authors ask, “that the use of capital letters promotes consumer understanding?”
A more sinister interpretation is that companies “play on the naivety of the judiciary to hide some of the most incriminating and costly terms from plain sight by using capital letters”.
In this scenario, the authors write: “Courts not only fail to protect consumer interests by favoring capital letters, they also invite abuse.”
A better and braver Alternative to uppercase
So if archaic and screaming uppercase formatting doesn’t work, what will?
The researchers compared four other ways to emphasize text and found that boldface provided the most promising results.
In two experiments, bold text outperformed “boxing” text in a so-called Schumer box (New York Senator Chuck Schumer sponsored legislation to make credit card statements easier to understand).
It also outperformed “single caps” (i.e. a sentence in all caps within an otherwise normal capitalized paragraph) or plain text.
These results support previous research showing that readers prefer bold over other types of emphasis.
And they also demonstrate that formatting interventions can actually improve consumers’ ability to understand the important terms of the contractual agreements they enter into.
The authors of this paper don’t pull punches into the choice for change.
“We believe there is compelling reason to abolish reliance on the judiciary in capital letters,” they write.
“Courts should stop giving any weight to the use of capital letters in contracts” and “should abandon the age-old policy of encouraging companies to use them in their contracts.”
Study: “ALL-CAPS”Authors: Yonathan Arbel and Andrew TolerPublished in: Journal of Empirical Legal StudiesPublication date: 2. November 2020DOI: https://doi.org/10.1111/jels.12272Photo: by Andrea Piacquadio via Pexels
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