EULA Defenses cracking ! I hope... kekekekekeke.... (1 Viewer)

[zazoot]

http://www.wired.com/politics/law/commentary/circuitcourt/2007/08/circuitcourt_0801

 

[zazoot]

Courts Turn Against Abusive Clickwrap Contracts
Commentary by Jennifer Granick 08.01.07 | 2:00 AM
Do you, Jennifer Granick, by the act of opening this box of software, agree to the terms and conditions set forth on the 62-page legal document enclosed in this box and also available on our website, so help you God?

Since 1996, the answer has been, "Yes, I do, whether I want to or not." That's when the influential appeals court Judge Frank H. Easterbrook ruled that an end-user licensing agreement, or EULA, stopped one Matthew Zeidenberg from copying and reselling a telephone directory he'd purchased on CD. At its simplest, the court ruled, contract law binds parties to make good on their mutual promises. So if a customer manifests her agreement to a sales proposal by opening a box and failing to return the product -- after she's had the opportunity to see what the vendor expects she will and won't do -- then she is legally required to keep her word, no matter how onerous the contract's demands.

In the past month, however, two new court rulings suggest that judges are developing a more sophisticated sense of how corporations conduct online and technology transactions with their customers.

The EULAs or terms-of-service agreements are long and legalistic, the deals are offered on a take-it-or-leave-it basis and the terms are often oppressive and one-sided. As a result, the legal hegemony of the EULA is cracking. This is a good development for consumers, who would otherwise be saddled by oppressive terms they have neither the legal sophistication to understand nor the bargaining power to avoid, and for the public interest, which suffers when customers are forced to waive rights that capitalist democracies rely on for innovation and accountability.

In Gatton v. T-Mobile (.pdf), the California Court of Appeal struck down a provision in the mobile phone company's EULA requiring consumers to go through arbitration to challenge termination fees or the practice of selling locked handsets that can't switch carriers with the customer. The court held that both the way customers entered into the EULA contract, and the arbitration terms of that contract, were unconscionable, and therefore the provision would not be enforced.

The reasons the court gave for holding the EULA procedurally unconscionable apply to most EULAs. Even though the arbitration term was fully disclosed to consumers, the contract was one of "adhesion": an agreement imposed and drafted by the party with superior bargaining strength, which gave the consumer only the opportunity to accept or reject the contract, not to freely negotiate it. As a result, the customer's unequal bargaining power results in an absence of meaningful choice. The fact that the customers could choose a different carrier may mitigate, but not cure, the procedural unconscionability.

Next, the court ruled that the substance of the arbitration term, which denied consumers the right to bring a class action, was unconscionable because that form of litigation is often the only means of stopping and punishing corporate wrongdoing. Even though there was only some procedural unconscionability, when weighed on a sliding scale with the substantive harm to consumers, the court refused to dismiss the class action.

Gatton is an important case because it recognizes that every clickwrap, shrink-wrap, browsewrap and box-wrap contract has an element of procedural unconscionability that requires the court to consider whether the challenged term of the contract is overly harsh or one-sided. This opens up the content of contracts to legal supervision, which is great in a situation where the customer hasn't really been able to bargain, negotiate or otherwise exercise market power.

 

[WonderBoy]

wow... that is more then awesome. I know its the wrong place but a third party program being run by another person/company (im not sure if im aloud to mention it or wether its safe to mention at all) is currently battling blizzardover they're EULA. It really makes you think about what we have been agreeing to all this time huh? Selling our soul and all that =P