Recently in electronic contracts Category
After a seminar today run by Peter Black on the use of 'Web 2.0' in teaching, Peter and Jessica Coates tried to convince me that Facebook is not, in fact, crap, and is substantially better than Myspace; which is presumably, impliedly, crap. Unless you're a ditzy teenager whose life ambition is to be on Paris Hilton's friends list and thereby gain some kind of incredibly lame validation. But I digress...
Earlier in the seminar, I'd voiced my objection to the possibility that students might be compelled to become members of some of these 'Web 2.0' services to do mandatory assessment items in some subjects. This would, of course, require those students to enter into a contractual relationship with those service providers, with associated legal liability and privacy risks. It might also constitute third line forcing, which is per-se illegal in Australia, but that's a different issue.
The concerns I raised were largely dismissed as paranoia. So, I got to thinking, exactly what is in the applicable contracts for a service like Facebook? In this posting, I dissect the Facebook 'Terms of Use'... You know, that massively long (over 6000 words), complicated, contractual document that nobody ever reads when they sign up.
Earlier in the seminar, I'd voiced my objection to the possibility that students might be compelled to become members of some of these 'Web 2.0' services to do mandatory assessment items in some subjects. This would, of course, require those students to enter into a contractual relationship with those service providers, with associated legal liability and privacy risks. It might also constitute third line forcing, which is per-se illegal in Australia, but that's a different issue.
The concerns I raised were largely dismissed as paranoia. So, I got to thinking, exactly what is in the applicable contracts for a service like Facebook? In this posting, I dissect the Facebook 'Terms of Use'... You know, that massively long (over 6000 words), complicated, contractual document that nobody ever reads when they sign up.
Continue reading Dissecting the Facebook 'Terms of Use'.
The Consumerist reports on a judgment from the US Court of Appeals for the 9th Circuit in Shroyer v New Cingular Wireless Services Inc, which held that a class action waiver and mandatory arbitration clause in a mobile phone contract was unenforceable because it was unconscionable under California law.
This is the latest in a line of cases in which courts have rejected "get out of court free" contract provisions by holding that they were unconscionable. Another such recent case was Gatton v T-Mobile USA Inc.
Linden Labs, operators of the "Second Life" virtual world, suffered a high profile defeat earlier this year in a very similar case - Bragg v Linden Research Inc.
The case that seems to have started this ball rolling was Comb v Paypal Inc, a 2002 decision. Courts seem to be increasingly aware that corporations are abusing their ability to dictate terms in this fashion, in an attempt to "insulate [themselves] contractually from any meaningful challenge to [their] alleged practices" [from Comb v Paypal]
Another recent 9th Circuit decision in Douglas v Talk America Inc held that a company could not unilaterally alter a contract merely by putting an updated version of the contract on its website, despite a provision of the contract that purported to allow them to do so.
Hopefully, these cases will put companies on notice that the days of "we own your soul" contracts are at an end. But I doubt it. It remains to be seen whether statutory schemes against unfair terms in consumer contracts will have that effect.
Readers interested in the topic of unfair terms in electronic contracts may be interested in reading an article I co-authored on that topic: Dale Clapperton and Stephen Corones, 'Unfair Terms in Clickwrap and Other Electronic Contracts' (2007) 35 Australian Business Law Review 152.
This is the latest in a line of cases in which courts have rejected "get out of court free" contract provisions by holding that they were unconscionable. Another such recent case was Gatton v T-Mobile USA Inc.
Linden Labs, operators of the "Second Life" virtual world, suffered a high profile defeat earlier this year in a very similar case - Bragg v Linden Research Inc.
The case that seems to have started this ball rolling was Comb v Paypal Inc, a 2002 decision. Courts seem to be increasingly aware that corporations are abusing their ability to dictate terms in this fashion, in an attempt to "insulate [themselves] contractually from any meaningful challenge to [their] alleged practices" [from Comb v Paypal]
Another recent 9th Circuit decision in Douglas v Talk America Inc held that a company could not unilaterally alter a contract merely by putting an updated version of the contract on its website, despite a provision of the contract that purported to allow them to do so.
Hopefully, these cases will put companies on notice that the days of "we own your soul" contracts are at an end. But I doubt it. It remains to be seen whether statutory schemes against unfair terms in consumer contracts will have that effect.
Readers interested in the topic of unfair terms in electronic contracts may be interested in reading an article I co-authored on that topic: Dale Clapperton and Stephen Corones, 'Unfair Terms in Clickwrap and Other Electronic Contracts' (2007) 35 Australian Business Law Review 152.
