The Validity of End User License Agreements Redux

aheram — Mon, 01 Dec 2008 16:38:00 GMT

I have been reading The Technology Liberation Front (libertarians critiquing developments in the fields of the internet and technology) and came across Tim Lee's repost of the popular webcomic XKCD regarding End-User License Agreements (EULA) with a question, "Legally enforceable?"

Wendy Grossman explained the legal gray area that surrounds every EULA software companies use for their softwares:

If you did read the terms, you might be surprised. Eulas typically specify that the software's publisher is not liable if anything goes wrong. They typically specify the publisher's preferred jurisdiction for legal disputes. And some are even more restrictive: some graphics packages have been known to specify that they cannot be used in the production of pornographic images. Yet these licences are, as Hanlon complained, not really contracts: you generally cannot read them before you buy (rather than use) the software, and you can't negotiate terms.

I have tackled the question before in Copyfascism Watch, where I raised another point that EULAs are not voluntary contracts as they are not agreed upon prior to the purchase of the software. And there is the bizarre claim by manufacturers that consumers are merely purchasing the physical CDs and not the software it contains. I asked, "How legitimate are the claims of manufacturers that consumers are merely buying the CDs and not the permission to install and use the software for which the consumer (rightly, I might add) believed he is paying?"

Jeffrey Tucker of the Mises Blog responded:

[R]estrictive covenants do this all the time with houses for example. You buy the house in a particular neighborhood and it is really yours, but you can't paint your shutters pink and you have to mow your grass and can't leave a sofa on the porch etc. Why can't EULAs amount to a sort of covenant?

In the Mises Blog, Tucker also asked this question, "Are EULAs contrary to property rights?" Tucker seems to be of notion that is similar to a covenant, but therein lies the issue and the difference between physical property covenants and EULAs: covenants are known and agreed upon prior to purchase, EULAs are hidden contracts that is then revealed to you after the purchase.

A commenter named PR raised the same point:

Since the EULA isn't revealed until after the buyer has handed over his money, of course it shouldn't be considered a valid agreement. All the examples of convenants I know of are presented to the buyer before the sale, but a EULA is more like a legal Trojan horse that restricts the use of property one already owns.

Many of the responses seem to miss that point and the important issue regarding this unconscionable agreements: it is secret, it is hidden, and cannot be agreed to prior to purchase. A commenter pointed out that you can always return the software, but most stores I purchase software from only have a return-policy for unopened boxes of software. Of course, one can argue that one can choose not to patronize the store that has taken one's money for a software crippled by an agreement one cannot agree to prior to purchase and afterwards, but since when do libertarians make excuses for theft?

Cross-posted to Red State Eclectic.

The Validity of End User License Agreements

aheram — Sun, 04 May 2008 23:27:00 GMT

Wendy Grossman explains the legal gray area that surrounds End-User License Agreements (EULA) that Microsoft et al slaps on every piece of software it sells to consumers:

If you did read the terms, you might be surprised. Eulas typically specify that the software's publisher is not liable if anything goes wrong. They typically specify the publisher's preferred jurisdiction for legal disputes. And some are even more restrictive: some graphics packages have been known to specify that they cannot be used in the production of pornographic images. Yet these licences are, as Hanlon complained, not really contracts: you generally cannot read them before you buy (rather than use) the software, and you can't negotiate terms.

One of the problems that needs to be resolved in the copyfight is the validity of licenses, which not only includes all EULAs, but Creative Commons and open-source licenses like the GNU as well. An argument cannot be made that the consumer and seller participated in a voluntary-exchange, when often the terms of the EULA are not agreed to prior to the purchase. How legitimate are the claims of manufacturers that consumers are merely buying the CDs and not the permission to install and use the software for which the consumer (rightly, I might add) believed he is paying?

We do not accept that Ford or American Eagle (a clothing company) has any say in how we use the products they sell us after it is sold to us. Why then do we give software companies this right?

Copyfascism Watch : eula

The Validity of End User License Agreements Redux

The Validity of End User License Agreements