Mike, what are your thoughts on this? I’m not so sure I disagree–I say this as a libertarian. My own theory of contract is presented in my article A Theory of Contracts: Binding Promises, Title Transfer, and Inalienability.

On the issue of the enforceability of “fine print” and related matters (that may have a bearing on the issue decided here), see my comments here:

The problem with such an attack on shrinkwrap etc., is that if you prevent it, vendors will find a way around it. E.g. if you say EULAs are unenforceable b/c they are not known ahead of time, then the software vendor can simply sell only thru stores or outlets that make the customer sign an agreement upon purchase. Then the EULA-opponents will just shift their attacks and come up with another argument.

That said, I do think a better argument against even click-wrap agreements (which ARE agreed to before the purchase) is that there is often no meeting of the minds on the fine print. If the customers routinely just click the “I have read and agree to these terms” box but never do read it, and the vendor knows this, then it’s a sort of fiction to assume both sides have actually agreed on these terms. For example supposed buried in fine print for a contract for sale of a $20 program, is the provision, “Buyer agrees to give 50% of his income to Vendor for life.” Is this enforceable? Of course not. Why not? Because there was no agreement to this. So the “hidden” terms have to be in some sense reasonable, at the least.

Also here:

There’s a lot of confident assertions about the law being made here by non-lawyers. I, an IP attorney, am not even sure what the law is, but I have a guess (I’d need to review the law on this to be sure). I think that the law is that in general, shrinkwrap and similar agreements can be binding, but if you try to do this to effectively get more protection than copyright law allows, this would probably not be enforceable on some kind of confusing monopoly/policy/preemption grounds. The state gives you a monopoly (copyright, or patent), but you are not supposed to abuse it or try to extend it.

(My main expertise is in patents, but I think something vaguely similar would apply for copyright. But for patents, for example, say you have 10 years left on the patent term: you may not do an 11 year license; this is considered to be an impermissible extension of your monopoly, and an abuse of it–of course, this makes no sense, b/c you could just do a fixed license fee instead, but whatever.)

As for libertarianism, my view is that the state is WRONG to strike down contracts that go beyond the patent and copyright type protections. I believe two consenting parties have the right to enter into whatever terms they want, even if they are stricter and more draconian than those set by modern IP law. But there are 3 strong caveats to this. First, I do not believe that something is part of the agreement *merely* because it is written down in the fine print of a click-wrap or similar type agreement; there needs to be true meeting of the minds (for example, suppose I sneak into the last clause of a long click-wrap agreement, “And the purchaser hereby agrees to give me half his income for the rest of his life.” Well, I konw that you are just gonna click “yes” without reading, so I am aware that you are NOT consenting to this term, so there is no meeting of the minds; that should not be enforceable, and arguably neither should boilerplate, “unreasonable” terms in fine print that the publisher knows the customer is not even really aware of).

Second, there are many practical limits to the real-world enforceability of such terms. Suppose A sells B a book–rather, partial ownership in a book–but keeps partial ownership, the “right to show others.” So B is like a borrower of the book, or a lessee–he has no right to use the book in such-and-such a way–he has no right to show it to his friend C. But let’s say he does: C is visting and sees the book on the coffee table; and browses it. He thinks all he needs is B’s permission, which he has; but in reality it is not B’s book (completely); so C is seemingly trespassing against A’s rights, by using A’s property in a manner A has not consented to.

But I believe that in such cases, A does not always, or even usually win, vis-a-vis C. This is b/c by A permitting B access to an object where A’s remaining rights in the object are not apparent to third parties like C, it is more A’s fault than C’s that C is unaware he has no permission. (My view here is similar to the way the law deals with stolen checks–usually if a check is stolen, and/or forged, the drawer is not liable or responsible for this; see UCC sec. 3-403. However, if the drawer is negligent (say, he leaves his checkbook in plain view when he knows unscrupulous people might take it), then he can’t assert the forgery as a defense against others who took the check etc. — see UCC – § 3-406. NEGLIGENCE CONTRIBUTING TO FORGED SIGNATURE OR ALTERATION OF INSTRUMENT.

(a) A person whose failure to exercise ordinary care substantially contributes to an alteration of an instrument or to the making of a forged signature on an instrument is precluded from asserting the alteration or the forgery against a person who, in good faith, pays the instrument or takes it for value or for collection.

(b) Under subsection (a), if the person asserting the preclusion fails to exercise ordinary care in paying or taking the instrument and that failure substantially contributes to loss, the loss is allocated between the person precluded and the person asserting the preclusion according to the extent to which the failure of each to exercise ordinary care contributed to the loss.”)

Third, I believe practicalities of the business world would tend to make abusive or unreasonable restrictions on the use of products purchased, or information dissemination, very unpopular, and thus to impose pressure on publishers/sellers to minimize all this.