Hyperlinked Contract Terms Are Enforceable
from the even-if-not-visited? dept
There have been plenty of questions over the years about the enforceability of online contracts, especially of the "clickwrap" variety. However, a recent ruling apparently says that contract terms are acceptable even if hidden behind a hyperlink. Apparently, the court found that because the link to the terms is "highlighted" in a different color, it's consider conspicuous enough that a reader should have clicked on it and read it.Now, that's interesting to me, because I'd just been reading law professor Peter Friedman's blog post for his first year Contracts law class, where he talks about how few people actually read online agreements, and how many people probably agree to things they didn't think they had agreed to:
65 out of my 66 students (law students in a contracts class!) admitted in our first class they rarely or never read the online agreements they "agree" to. The only empirical survey I am aware of regarding consumer behavior in connection with online agreements found the following 7 years ago:We've seen similar things in experiments that offered prizes within the clickwrap agreements, to see if anyone claimed them -- and it took four months and 3,000 downloads for anyone to claim the prize. In many ways, this actually reminds me of an old story about Van Halen's concert contracts with local promoters and venues, that was getting lots of attention last month, after it was featured on an episode of This American Life. Many people have heard the story of how the band had a rider in its contract demanding a bowl of M&M's backstage with all the brown ones removed. And most people who heard that story assumed it was a sign of rockstar divas with ridiculous demands. However, the true story is that it was actually in there to see if the people setting things up had actually read the details of the contract:Andrew Gatt, "Electronic Commerce -- Click-Wrap Agreements: The Enforceability of Click-Wrap Agreements," doi:10.1016/S0267-3649(02)01105-6 (2002).
- 50% of the respondents said that they sometimes read online agreements and 40% never read them;
- Thus, only 10% of the respondents always read the online agreements that they encountered;
- Well over half of the respondents (64%) always click the Accept button and most of the others (35%) some times Accept;
- More than half of the respondents (55%) didn't believe that they were entering into a legally binding and enforceable contract even after clicking I Accept;
- Most (79%) never ever kept a copy of any click-wrap agreement that they entered into;
- The majority of respondents (90%) indicated that they never completely read shrink-wrap agreements;
- 38% of the total respondents came from the IT/Internet/E-commerce industries.
Van Halen was the first band to take huge productions into tertiary, third-level markets. We'd pull up with nine eighteen-wheeler trucks, full of gear, where the standard was three trucks, max. And there were many, many technical errors -- whether it was the girders couldn't support the weight, or the flooring would sink in, or the doors weren't big enough to move the gear through.And, indeed, what the band found out is that the contract is just as enforceable whether or not you read the contract -- and that appears to be the result online too. While I have heard of a few cases of courts rejecting clickwrap agreements, it certainly sounds like more and more are considering them to be viable, legally-binding contracts.
The contract rider read like a version of the Chinese Yellow Pages because there was so much equipment, and so many human beings to make it function. So just as a little test, in the technical aspect of the rider, it would say "Article 148: There will be fifteen amperage voltage sockets at twenty-foot spaces, evenly, providing nineteen amperes . . ." This kind of thing. And article number 126, in the middle of nowhere, was: "There will be no brown M&M's in the backstage area, upon pain of forfeiture of the show, with full compensation."
So, when I would walk backstage, if I saw a brown M&M in that bowl . . . well, line-check the entire production. Guaranteed you're going to arrive at a technical error. They didn't read the contract. Guaranteed you'd run into a problem. Sometimes it would threaten to just destroy the whole show. Something like, literally, life-threatening.
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What do they have to hide?
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There just isn't time
I believe that the EFF has some webpages that deal with the t's and c's of a number of well know web based services and in particular draw attention to significant changes.
Having read some of that stuff I decided that I would never have anything to do with certain services.
Some of them, if thought through are sort of self contradictory - almost to the point of comedy.
I particularly liked the provisions about names in WoW - which amount to : You shall not choose a name that is either meaningful or meaningless....
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Re: There just isn't time
Have you ever used that? They have two terms and conditions before you even start playing. Then there's another one after every single update and patch. I swear I've clicked I agree 12 times and have no idea what it says. I tried reading it once but it seemed to be in another language, and it would have taken me longer to read it than to play the game.
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Re: There just isn't time
Personally, I intend to rely on the "prove it was me that ticked your stupid agreement box" defense if I'm ever called on one of these contracts.
It's a *moronic* defense, I know, but it's a damned sight more convenient than actually reading the agreements in the first place.
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How many times have we heard about brown M&Ms?
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Re: How many times have we heard about brown M&Ms?
This is an extremely clever idea to ease the burden of double-checking people. If they took care of the M&Ms, then you can have a reasonable expectation that they took care of other details. If not, then you better start looking over their shoulder, quick.
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Hyperlinks and Online Contract are meaningless
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There needs to be some kind of limits on what can be included in an agreement like that, or at least limits on the possible concequences of breaching it.
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Re:
I have come to realize that I am not going to understand the contract anyway.
And what I mean by that isn't that I am not going to understand English. Rather, I am not going to be able to parse the word choices the lawyer made, and relate those word choices back to the civil law to know the implications of the word choices.
So, there is no way for me to make an informed decision anyway. Why bother reading?
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What about the Color Blind?
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er...
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Cory Doctorow's take
for a good discussion of this - and put his rider at the bottom of all your emails
READ CAREFULLY. By reading this comment, you agree, on behalf of your employer, to release me from all obligations and waivers arising from any and all NON-NEGOTIATED agreements, licenses, terms-of-service, shrinkwrap, clickwrap, browsewrap, confidentiality, non-disclosure, non-compete and acceptable use policies ("BOGUS AGREEMENTS") that I have entered into with your employer, its partners, licensors, agents and assigns, in perpetuity, without prejudice to my ongoing rights and privileges. You further represent that you have the authority to release me from any BOGUS AGREEMENTS on behalf of your employer.
There that's fixed it - at least for every company that has an employee who reads this site.
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Just because people are too stupid to read
I really don't see the point of pouting and whining over this issue.
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Re: Just because people are too stupid to read
In the cases cited by Mike's link, the terms in question were regarding the fair conduct of a transaction, including remedies and arbitration clauses. This I would consider fair (as in.. they should have read the contract), since the clauses don't seem to infringe on anyone's rights or try to make a grossly unfair
However, I would take issue with a court decision supporting a contract where specious or potentially infringing terms were embedded, such as the release of private information without a clearly visible opt-out clause.
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Re: Re: Just because people are too stupid to read
eg the original myspace contract gave them the rights to every original song uploaded on the site, the VISTA EULA gives Microsoft the right to delete any file it doesn't like from your hard drive. Most commercial webservices will attempt to get some kind of copyright control over user created content - not always as extreme as the myspace example but still beyond what you would normally expect.
Personally I think it should work the other way around. The user should create (perhaps with some legal help - or there could be standard ones) his/hers own terms and conditions for signing up to these services. They could then be matched against the company's requirements and any mismatch highlighted. The user would then get the option to waive the condition in question or punt it back to the company who would then be required to give it consideration (by a human).
That way maybe we could create a two way "market" in t's & c's rather than the land grab we have at present.
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Re: Just because people are too stupid to read
I would argue that these agreements are written in such a way that it *requires* a lawyer to correctly interpret them.
This is a fundamental problem. How can we honestly expect someone to agree to a legally binding contract that they don't, and can't reasonably be expected to, understand?
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Re: Just because people are too stupid to read
However, I know that lawyers intentionally create documents that only other lawyers could fully understand. The idea being that if you need a lawyer to comprehend it you will pay some lawyer for that service.
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Re: Just because people are too stupid to read
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ground rules
If I read every 25,000 word legalese agreement presented to me I would need a day to be 48 hours long instead of 24.
It is simply absurd to have to read and agree to a 25,000 word legal contract every time I do even the simplest task.
F-ing lawyers
And what if you disagree or need clarification on the interpretation of the language? Nobody can help you. The response from the company will be "these are our terms accept or decline them."
Imagine if before you got a Big Mac you had to sign and initial a 25,000 word legal contract. It is farking ridiculous and needs to stop.
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Another problem
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Even if you read the linked part before clicking 'Accept'...
I'll use an extreme example rather than play with subtleties.
You read the online EULA and clicked 'accept' as you agreed to allow the company to update their software on your machine as and when it was required by their software updating service.
Some months later, you get dragged into court for somehow breaking the EULA.
"The online EULA says you agreed we could kill your pets, have sex with your partner, install any malware we feel like uploading to your computer and extract funds from your bank account daily for rental of the software. You clicked 'accept' so you must have been happy with all of that. Although we did run over your cat, your partner is not at our offices every Thursday and we're still waiting for the agreed to additional payments."
Personally, I'll stick with whatever is on the disc at the time as they can't tamper with what sits in the box on pressed media. Tin-foil hat or not, I deeply distrust any kind of fixed agreement that is so easily editable as even a modest alteration can have far-reaching consequences; the larger the EULA and the more complex the legalese contained in it, the easier to hide something unpleasant and the worse it could become.
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Re: Even if you read the linked part before clicking 'Accept'...
I PDF (signed with an email cert) online Ts&Cs, as you never know when it'll come in handy.
My previous ISP had a section requiring any change to be agreed by both the ISP *and the client*. When they altered the terms to require a additional penalty fee for leaving early, I whipped out the PDF and said 'do you really want this to go any more pear-shaped than it is?' to which they replied 'here's your refund'.
Give someone a way to weasel their way into a better position, and you can be guaranteed they'll use it.
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Re: Re: Even if you read the linked part before clicking 'Accept'...
And it usually has some clause like, "we can change these terms with no notice." Part of the reason I don't pay any attention to them in the first place.
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Re: Re: Re: Even if you read the linked part before clicking 'Accept'...
didn't some US court previously rule that any T&C or EULA including a 'we reserve the right to change this at will' clause was invalid in it's entirety? i remember something like that showing up on techdirt.
so really, you only have to check for that clause. if it's there, no worries.
assuming that ruling held up, anyway.
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Purchased Software
I've often wanted to write software and include a clause granting me the sole ownership of all of their property. Then show up with a truck and start taking things and watch the mayhem that results
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Re: Purchased Software
and if it's signed under duress, how is it enforceable or binding?
i mean, you Could just not use it, but... if you disagree with the EULA doesn't it kinda conflict with the ... implied? contract involved when you bought the thing?
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Too Stupid to READ....
The whole system needs to be scrapped and revamped... and patently ridiculous lawsuits should be pre-emptorily dismissed (McDonalds??? Seriously... )
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Re: Too Stupid to READ....
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Re: Too Stupid to READ....
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Not the same thing...
The difference here is that this isn't a question of whether the contract was read or not, but whether the party even knew that the contract existed. THAT is absolutely critical to a website TOS.
Sometimes those links are at the bottom of lengthy pages where a user would never even scroll down to see them, much less know they were haphazardly jumping into an unread agreement.
There's a reason most people don't read them. Half the time, they are completely unaware of them.
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where in the transaction is the ToS
this is not some bullshit ToS at the bottom of a webpage, where they want every single person who visits the site to agree to some ridiculous terms. when you compare the previous case to the dell case, it's pretty obvious that the ToS bullshit you see on most sites is unaffected by this ruling.
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Re: where in the transaction is the ToS
The limitation of damages clause is standard in consumer contracts, but atypical in large commercial transactions. Indeed, the opposite (an indemnification provision) is often included in large commercial transactions (where the buyer has more power).
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The problem is that these are classic adhesion contracts (that is, "take it or leave it" contracts). At common law, adhesion contracts were disfavored, and often unenforceable. This is because contracts classically require an offer, an acceptance (ie - a negotiation), and a mutual intention to be bound. They are supposed to be a "bargained-for exchange". Adhesion contracts lack negotiation and bargaining.
Worse, they are unavoidable. The argument has been that they are not bad because if you do not like Amazon's terms, you can always shop at Walmart. The trouble is, Walmart has the same terms.
Imagine if your grocery store handed you "Terms and Conditions" every time you went to buy milk. You would find it ridiculous, particularly if they were 25 pages long. You might stomp out (sans milk) and go across the street to the competitor. Imagine finding that they had them, too.
Now imagine that they _don't_ have them - instead, they have a sign behind the register that says, "By shopping here you agree to certain terms and conditions. Please ask a manager if you would like to read the terms and conditions." On page 17 of the terms and conditions that the manager keeps in his office is an arbitration clause that provides that any dispute concerning your purchase (however small) must be resolved by binding arbitration before a three-arbitrator panel in the grocery chain's home state (which is not your state). When you get overcharged 37c for your milk, should you be forced to go to arbitration? 700 miles away?
How is enforcing that agreement good for society? Remember, law exists for society, not just for grocery stores or websites.
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hidden link same color as text
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contract blues
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If I'm a company, like all those places paying for a big name band to come make me money by playing in my venue, then I better be reading the contract - or have a lawyer that can do so for me and give me the nitty gritty details, thereby catching the brown M&M point.
I'm not a company and I shouldn't need a lawyer every time I go to buy a piece of software. Any tech junkie would send a small, or even large, fortune on lawyers doing that.
I'm not an idiot, and my reading level is well past the norm - hell, I can even make out what some of those paragraphs mean in that contract - that doesn't mean I can read the whole thing. After half a page the eyes cross and the brain starts melting out the ears. If I wanted to read that kind of junk I'd be in law class right now.
I think these online contracts, of whatever sort, need some form of standardization, if for no other reason than to protect joe-schmoe from the sharks that are out there.
And lets not even comment about the barely computer functional and the blue link idea...
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