Color Helps Consumers Notice and Understand Contract Terms

Consumers seldom read or understand the terms of online contracts, even when those terms are visible on-screen. Across three experiments (N = 6,500) we show that using colors to highlight a target clause can markedly improve consumer understanding on visual recognition, unprompted understanding, and information-retrieval measures without decreasing understanding of untreated clauses. By contrast, the prevailing approach of presenting a target clause in all capital letters is ineffective. A webcam eye-tracking study (N = 320) suggests that color may work by making the target clause visually distinctive—consistent with the isolation effect—without increasing reading time. However, we observe that colors are less effective once multiple clauses are highlighted. These findings chart a practical route for strengthening conspicuousness standards in contract law.