For the London Free Press – March 17, 2008

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In the United Kingdom, the National Consumer Council recently filed a complaint with the Office of Fair Trading stating that consumer software licences contain an imbalance of rights in favour of the manufacturer at the expense of the purchaser.

The complaint is about End User Licence Agreements, or EULAs. Anyone who has installed software onto their personal computer has likely entered into a EULA. This is an agreement between the software manufacturer and the purchaser who will use the software on their computer.

Usually the purchaser is bound to a EULA by way of a “click-wrap agreement,” where one must click an “I agree” icon to confirm they agree to the terms of the EULA that is presented. Click wraps are more prevalent than “shrink-wrap agreements” that are worded to bind when one opens the package.

The complaint states that EULAs can often be unfair because “consumers can’t have a clue what they’re signing up to when some terms and conditions run to 10 or more pages.”

It is also about the customer not seeing the EULA until after the software is purchased which “. . . means that consumers are unable to make informed decisions before they buy a product, yet are being forced to take on an unknown level of legal responsibility.”

The complaint names a total of 17 companies, including Microsoft, Adobe and Symantec.

It seems odd that this complaint would be raised now, since EULAs have been used for many years. And one-sided “contracts of adhesion” have been around far longer.

For example, when you buy a ticket to an event or to park in a private parking lot, you have entered into a similar agreement. The terms of these agreements are also only available after you have made your purchase, as they are usually printed on the ticket.

While is it true that the purchaser is unable to review click-wrap and shrink-wrap agreements until after they have purchased the software, it is unlikely that even when given the chance, purchasers would bother to read the agreement. Purchasers usually accept the terms without reading them and continue with the software installation.

Even if consumers did take the time to read the agreement, it would be rare for someone to decide they did not want to buy the product on those terms.

In any form of agreement where there is an inequality of bargaining power, especially when consumers are involved, there is indeed room for abuse within the agreements.

That’s why in most jurisdictions consumer protection laws will limit what terms these agreements can include. For example, in Ontario the law states that any term that requires arbitration instead of a class action will not be enforced.

And courts are not inclined to enforce provisions that they consider unreasonable or unexpected in that type of agreement.

While EULAs are often not as simple, short, and elegant as they should be, that’s more of a drafting issue than a content issue. The probable outcome of the complaint is that vendors will continue to bind consumers to EULAs, provided the agreements don’t cross the line into unusual provisions.