Exclusive contract law for data transmission (III)

It is generally believed that the personal data market is dysfunctional, and interventions that seriously deviate from the general principles of contract law are needed to correct these problems. Some of these recommendations are based on concerns about how personal data transmission may affect third parties. Others are out of non-instrumental considerations.

Many aspects of contract law can be used to eliminate or mitigate the impact of information barriers. First, it may be useful to adjust rules on formation and enforceability, which can effectively attract consumers to read and understand. Second, implied restrictions on use or transfer can protect consumers who fail to recognize the value of such restrictions.

According to the general rules of contract relativity, the agreed use or transfer restrictions cannot be enforced against third parties in the contract. In the event that the original transferee’s claim is insufficient to prevent or provide compensation for breach of contract, the insistence on relativity limits the effectiveness of contractual restrictions. In order to facilitate execution, it may be necessary to restrict the use of data or impose restrictions on the third party to which the data is transmitted, regardless of whether the third party agrees.