Let the user beware

If the box that says “I Accept” (regarding a website’s terms of use)  really is the most dangerous place on the web, as I wrote several weeks ago, it is getting even riskier out there.  For a long time, a relatively safe rule-of-thumb has been that EULAs (end user license agreements) that forced you to see their terms were enforceable, while those that merely offered you a chance to see them by clicking on a link you did not have to follow were not.  That has never been a hard-and-fast rule, and its utility has been seriously eroded by several court cases in recent years.

The most recent case involved a challenge to a “choice of forum” clause contained in the EULA for a site called ServiceMagic.  A lawsuit by Victoria Major was dismissed because it was filed in Missouri while the EULA says that all lawsuits must be filed in Colorado.  The Missouri Court of Appeals upheld the dismissal, even though Ms. Major never read the EULA nor was forced to see it and click “I Accept.”  The court held, as have several others in recent years, that the link was placed prominently enough for the terms to be enforced, even though there was no technological requirement to actually click through the license.  Some details about the case can be found here, on ArsTechnica.

The was an uproar several years ago about a proposed change in the Uniform Commercial Code called UCITA (the Uniform Computer Information Transactions Act) that would have made it too easy, its opponents felt, for consumers to commit themselves to licensing terms about which they had no knowledge and no chance to negotiate.  UCITA was adopted only in Maryland and Virginia, and it has since been withdrawn by its sponsors.  But the goal of UCITA to speed up Internet commerce by simplifying licensing, even at the cost of consumer protection, is being accomplished by courts around the country anyway.  This latest case is one in a line of similar cases that make it even more imperative that users look for and read licensing agreements, even if the site itself does not force them to do so.

There are a couple of caveats to this trend.  First, it is not universal.  A similar case against online retailer Overstock, reported here, went the other way, apparently because the link to the terms was not sufficiently prominent.  And in the ServiceMagic case one judge on the appeals court wrote that she would only uphold reasonable and expected terms like choice of forum, not terms that were “unconscionable.”  So perhaps we can expect a more active review of licensing terms when the licenses is merely a “clickwrap” or “browsewrap.”  Nevertheless, the most important caveat raised by these cases may also be the oldest — “caveat emptor.”