Legal Issues

by Mike Masnick

Filed Under:
contracts, courts, websites

Court Pushes Back A Bit On Unilateral EULA Changes

from the well,-that's-good dept

When we launched the public beta of the Techdirt Insight Community, one of the things we tried to be very careful about was the terms of service. We wanted to avoid a lot of the annoying things you find in many of the terms of service. It took two separate law firms and (not joking) one special two hour meeting explaining that the terms of service needed to actually be for the benefit of the user, rather than positioning us against the user, but eventually things worked out. One of the things the lawyers came back with initially was a clause saying that we could change the terms at any time and it was the users' responsibility to check. That seemed pretty lame. In fact, our product development team had already set up our system so that any changes to the terms alerts the user and will not allow them to login to the service without agreeing to the new terms. I'll admit that our terms still suggest that the user check the terms for changes, but it also lets them know that they'll be alerted to changes as well. It's good that we did this, because as Greg Beck alerts us, a court has ruled that websites can't unilaterally change contracts on customers and claim it's the users' responsibility to check for changes. Eric Goldman gives his take on the case as well. This is something that should be obvious, but apparently wasn't. In an age of EULAs that no one ever reads, it's good to see the courts recognizing that it may be a bit ridiculous to consider them binding -- at least in some specific cases.

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  1. icon
    Nick (profile), 26 Jul 2007 @ 7:44pm

    I remember reading the terms of the Insight Community when I was accepted and I knew there would not be anything fishy there becuase of the nature of your site. Before I got to the end of this post I almost thought you were going to have different versions of the agreement and that writing would be locked into the agreement version that was offered at the time. That could get messy but I know there are analogs to this found in other areas.

    reply to this | link to this | view in thread ]

  2. identicon
    Robert, 26 Jul 2007 @ 11:43pm

    Blizzard EULA

    I wonder if this could have any effect on the online Gaming Companies like Blizzard (World of Warcraft) and their EULA's that restrict basic gameplay and trading unilaterally with no recourse. They have banned hundreds of thousands of accounts based on a somewhat flimsy EULA imho

    reply to this | link to this | view in thread ]

  3. identicon
    Hjalmar Gislason, 27 Jul 2007 @ 1:23am

    Standardized EULAs

    Why hasn't someone come up with a system of icons representing typical EULA clauses - they all say pretty much the same anyway.

    Above the mandatory "I have read these terms" check box, the icons representing the EULA above would be displayed. Having read them once, the user knows at a glance what he's agreeing to.

    reply to this | link to this | view in thread ]

  4. identicon
    Anonymous Coward, 27 Jul 2007 @ 2:02am

    You need an unfair contracts law

    "The Unfair Terms in Consumer Contracts Regulations 1999 (SI 1999 No 2083) provide that a term which has not been individually negotiated in a consumer contract is unfair (and hence non-binding on the consumer) if, contrary to the requirement of good faith, it causes a significant imbalance in the rights and obligations of the parties to the detriment of the consumer."

    It's what allows a Brit to ignore crappy EULA terms that try to remove their rights under the sale of goods act, without being considered to have accepted the EULA.

    reply to this | link to this | view in thread ]

  5. identicon
    Nasty Old Geezer, 27 Jul 2007 @ 5:37am

    Re: You need an unfair contracts law

    I have always admired the British.

    Well done, sir, well done indeed.

    reply to this | link to this | view in thread ]

  6. identicon
    Bob, 27 Jul 2007 @ 1:34pm


    Only part of EULA I agree to on software is not sharing it with anyone. So does that mean when I click "ACCEPT" I am free and clear of all the other BS? I don't get a chance to negotiate it... I doubt it but I truly believe in my heart I only accept what parts of the EULA I agree with.

    reply to this | link to this | view in thread ]

  7. icon
    Steve R. (profile), 30 Jul 2007 @ 8:46am

    EULAs Not (in my opinion) Legal

    Ed Foster has written about several court cases that have found EULAs to be "flawed". I hope that Techdirt will also report more these types of court cases that have found EULAs to be flawed. Greater public exposer will help people realize that these supposed "contracts" are unenforceable.

    reply to this | link to this | view in thread ]

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