A thousand letters should be plenty for almost every contract the average consumer is likely to encounter if they stick to well-known and standardized terms instead of writing every contract from scratch in impenetrable legalese. I wouldn't set a hard limit of 1KB, but it's not a bad goal to strive for.
People can reasonably be expected to learn the nuances of a small set of common contracts; we could include this as part of the standard school curriculum. They cannot be expected to read and fully understand separate one-off contracts full of legal jargon for every company they happen to deal with. As such, deviation from the standards should be expensive. I would consider it perfectly reasonable to require companies to submit any custom contract terms to the courts in advance if they want them to be enforced against arbitrary members of the public, and to reject any non-standard terms which would not be readily comprehensible to at least 80-90% of the target audience.
I agree with not imposing arbitrary limits. The point was simply to keep the text as short as possible. For example, anything with a Creative Commons license can be described in at most eleven characters: the longest and most restrictive version is "CC BY-NC-ND". When you see those eleven characters you know exactly what the terms are for that work, without reading the full license text on each occasion.
I doubt we could compress all standard contract terms down to that length, but I do think most could be written in 1KB—or perhaps one printed page, double-spaced with decent margins—if we're only spelling out the truly unique parts.
People can reasonably be expected to learn the nuances of a small set of common contracts; we could include this as part of the standard school curriculum. They cannot be expected to read and fully understand separate one-off contracts full of legal jargon for every company they happen to deal with. As such, deviation from the standards should be expensive. I would consider it perfectly reasonable to require companies to submit any custom contract terms to the courts in advance if they want them to be enforced against arbitrary members of the public, and to reject any non-standard terms which would not be readily comprehensible to at least 80-90% of the target audience.