EULA and the UCC [LWN.net]

EULA and the UCC

Posted Nov 15, 2005 21:12 UTC (Tue) by ncm (subscriber, #165)
In reply to: Sony's rootkit: an update by pr1268
Parent article: Sony's rootkit: an update

First, the EULA is not a legally binding contract. In the U.S., the Uniform Commercial Code (UCC) makes clear that the vendor cannot place any additional restrictions or conditions on you, the buyer, after you have paid your money(*). If it's not on the outside of the box, it's wastepaper. Even if it is on the box, but contradicts local warranty consumer-protection laws, it's wastepaper. Similarly, any sort of "click-through" during installation is void: you already paid, it's too late to demand your acquiescence. If you have to click it to get to what you paid for (i.e., the music), then clicking it doesn't mean anything. It's better, as a policy, not to read it, except perhaps as a warning of what damage they are promising you might suffer, i.e. like the "hazard" warning on your toaster. (Be sure to tell your lawyer about your policy.)

Second, the danger is not Sony breaking down your door to try to enforce their (void) contract. At issue is whether you are owed damages for the harm they have caused you even though they "disclaimed" it. Did you "agree" to be kicked in the nether region, just by clicking on that button? Hell, no! (*) Even if it were a valid contract, any of its provisions that damage your machine are superseded by the warranty, and by any other laws they violated. I doubt a judge would even let them introduce the EULA in evidence, if your own lawyer is on the ball to object.

Third, I don't understand why everybody who writes about this acts as if the EULA had any legal standing. At most, paragraphs might be snipped from it to be introduced as written proof of Sony's malice aforethought.

Fourth, if you were harmed, you will be better off explicitly opting out of any class-action suits. You can sue Sony in your local small-claims court for (e.g.) the time it took to re-install your OS, and probably get treble damages. If your damage was greater -- e.g. local network compromised by worms taking advantage of the holes it installed -- you can still sue, and get treble damages, and Sony still probably won't spare a lawyer to show up and contest it. If you or yours were harmed, then please, please do sue Sony, and then blog all about it. Compete with other bloggers for the side of the damage award extracted. Make it worth your while; your damages (itemized) should include the time it took you to bring the case to court, too.

(*) I'm no lawyer. Also, last I heard, the UCC was rescinded in Maryland. Furthermore, in the U.S. Federal 2nd Circuit (NY, VT, CT), shrink-wrap EULAs were actually determined to be binding, although the decision was widely criticized and is said to be unlikely to be influential elsewhere. If you live in one of those places, you might be screwed -- however, since they broke the law, it might be void anyhow!

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EULA and the UCC

Posted Nov 18, 2005 1:02 UTC (Fri) by giraffedata (subscriber, #1954) [Link]

I'm no lawyer. ... Furthermore, in the U.S. Federal 2nd Circuit (NY, VT, CT), shrink-wrap EULAs were actually determined to be binding, although the decision was widely criticized and is said to be unlikely to be influential elsewhere.

Doesn't that kind of negate your whole first paragraph ("the EULA is not a legally binding contract")? On the left hand, we have someone who is not a lawyer, and some nebulous crowd of people criticizing a court decision. On the right hand, we have a federal appeals court judge in an actual court decision. Seems to me the left hand is all but empty.

I know the case in question quite well, and I haven't heard that people think it won't be influential anywhere else. The decision is solidly reasoned and there aren't conflicting decisions in other circuits. I'm sure there were the usual statements that a 2nd Circuit decision isn't binding anywhere else, but such decisions are nonetheless usually highly influential.

The judge, incidentally, not only describes why shrink wrap agreements are legally enforceable (giving precedents for well-accepted contracts that aren't complete until some time after money changes hands), but also that it would be bad policy if they weren't -- forcing people to waste packaging space on fine print nobody reads anyway.

I've also read the UCC, though not so recently that I remember every paragraph, and I sure don't remember anything about not being able to add restrictions on the buyer after the buyer has paid. There are plenty of contracts where paying money comes before negotiation is complete. If you have a section number, I'd be interested.