EULA Hoops
posted by Frank Pasquale
End User Licens Agreements (EULAs) govern virtually all software programs, and their restrictive terms have tended to multiply and intensify over time. Wendy Seltzer has expertly deconstructed the new Windows Vista license, and a number of commenters have added their own complaints. The terms of use appear to eviscerate rights traditionally enjoyed by users under copyright law. Seltzer concludes:
Users never asked for these impossible limitations. Microsoft decided unilaterally to add them, claiming it could abrogate personal ownership, fair use, and first sale rights because “The software is licensed, not sold.” If Microsoft faced real market competition on the home desktop, users could vote with their wallets, but anticompetitive practices and network effects [discussed here] make Microsoft a like-it-or-not proposition for most users.
Eric Goldman has also been covering the EULA wars, here and here.
Following up on these posts and some of Dave’s interesting contractual hypotheticals, I’m wondering how far the EULA can go. Can someone agree to a term like “The meaning of any contested terms of this license shall be exclusively determined by an agent of the licensor, and licensee hereby waives any right to appeal that determination”? Could this just be viewed as just another form of (lawless) arbitration? Or is this type of term a bit too extreme to be recognized by a court? If anyone can point to a good discussion of the topic, I’d be grateful.
October 26, 2006 at 11:14 am
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Mike - November 27, 2006 at 4:41 pm
Sorry about commenting on this older post, but let me help out a bit. I believe that most courts look to the sufficiency of notice of the term and the fundamental fairness of the term. Fundamental fairness is a pretty low bar, but I would very much doubt that your proposed EULA term would meet even that low bar.
Most courts draw their analysis from the Carnival Cruise Lines v. Shute case involving a forum selection clause on a cruise ticket.
I think it very obvious though that not every clause, even under notice/ff standard will be enforceable.
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