Hari's Corner

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Of EULAs and valid contracts

Filed under: Software and Technology by Hari
Posted on Wed, Jan 4, 2006 at 09:03 IST (last updated: Wed, Jul 16, 2008 @ 21:18 IST)

It's amazing how many people seem to accept Software License Agreements (or End User License Agreements) as the final authority that decides how you use a particular software. Over and over again, I keep coming across this argument on so many online discussions relating to software licenses and piracy.
(Assuming a holier than thou attitude) If you don't accept the license agreement, just stop using the software. If you break the terms and conditions, you're breaking the law and you can be put in jail/fined/punished for it.
I can understand why people without a legal background can get bamboozled by the wording of a software license agreement. But legal terminology alone does not a valid license make. You can take that from me. I'm not your law expert either, but I know enough of law to assure you that just because a software asks you to click on the I agree button, that doesn't necessarily mean that you've accepted the contract or that the contract is valid or enforceable by law. In many cases you can even say that forcing somebody to agree to the license agreement is itself an invalidation of the contract. Just think: when you've paid your hard-earned money for a software package, you're not likely to click I don't agree. And most people don't read the license agreement anyway, so the whole procedure turns out to be a mechanical gesture.

Has anybody ever tried to find out which country's laws you're bound by when you accept a license agreement? Sure, EULAs often talks about jurisdiction, but in most cases, unless you live in the same country as the software company, can they even enforce any of the terms against you? What about the laws of your own country? Have people ever bothered to find out if the license agreement is in accordance with your own country's laws? Because, there is no way that a software company can legally enforce anything against you by bypassing your own country laws.

I still keep wondering how many people actually think of the restrictions that software companies place on genuine, paying customers after they've shelled out their money for using the software. Suppose a software program incorporates a technology which does not allow you to make a backup copy for your own use, I'm sure the company can be sued in a consumer court. Customers have their rights as well for things which they've paid for, and I'm sure that software companies cannot go beyond a point in restricting the usage of their software for bona-fide customers.

The big catch here is that software companies (read giants) are huge entities and can sometimes get away with anything. An individual is often not in a position to seriously challenge a company for dubious business practices. I'm not saying that all licenses are invalid or unfair. It's just that customers often don't know their own rights with regard to software. Even In countries where customer rights are often asserted and enforced, software continues to remain a grey area. The culprit here is that the laws of so many countries have not caught up with current technology and hence there are so many loopholes and hazy areas in them. Of course software companies continue to manipulate this situation to their own advantage.

I believe that every country needs laws which protect consumers of software products, just like there are laws to protect consumers of other goods and services. There is a sore need to redefine the situation and clarify it so that consumers have a fair idea of their rights no matter where they live. When you buy any other product you own it. With software, you just get a license to use it. Obviously in such a situation the customer needs that much more legal protection against the company because the company is in a position to enforce their rights while the customer hasn't a clue as to what his rights are even after paying for the license.

The situation should change. In the meantime I believe that consumers of software products should be even more vigilant against unfair business practices and restrictive license agreements. The key lies in not accepting anything at face value but verifying its source of authenticity.

9 comment(s)

  1. What's your take on some GPL software that has a "microsoftish" licsence agreement at the beginning of the install?This is a good article, one that does not name names or turn into a rant- but I've just named two big names in this debate, oops! :)

    Comment by titanium_geek (visitor) on Wed, Jan 4, 2006 @ 19:34 IST #
  2. Titanium_geek, thanks for dropping by! :)I guess the focus of my article was not so much the proprietary vs. free software debate, but the fact that any consumer should be aware of his or her rights. It doesn't matter what the license is. Only if it is legally valid, is it enforceable in a court of law. That's my point. Many people seem to think that a software license agreement is gospel. Not at all. And that was the point of my post.It's like the sign you see in many supermarkets: "Goods once sold will not be taken back under any circumstances." Even if a shopkeeper has that in bold writing on his wall, it cannot be taken to be a binding contract because there are consumer laws which clearly contradict the absolute nature of such a statement and defective products clearly fall into this category.

    Comment by hari (blog owner) on Wed, Jan 4, 2006 @ 20:08 IST #
  3. This was a good article Hari - I liked it a lot! As you said, I tend to just click "I Accept" now - most EULA's tend to be the same anyway.I barely see the point in EULA's now - because I guess around 30 of every 1000 people actually read them from top to bottom. And it's not like I'm going to get arrested if I give my friend a copy of the AVG setup file just because it's against the EULA... ;)

    Comment by J_K9 (visitor) on Thu, Jan 5, 2006 @ 07:53 IST #
  4. If you haven't already, you should read the MS EULAs: There's some scary stuff in there if you live where EULAs are valid!(http://www.microsoft.com/windowsxp/pro/eula.mspx)Highlights include:"to the maximum extent permitted by applicable law, Microsoft and its suppliers provide the Product and support services (if any) AS IS AND WITH ALL FAULTS, and hereby disclaim all other warranties and conditions" - in other words, "if you get hit by a virus because our software's crap, it's not our problem"and "the entire liability of Microsoft and any of its suppliers . . . shall be limited to the greater of the amount actually paid by you for the Product or U.S.$5.00" - which gives the lie to MS's "Use our stuff, as if you're sued for patent-infringing software, you've got us standing behind you!"Fills you with confidence, eh?

    Comment by Dominic (visitor) on Thu, Jan 5, 2006 @ 14:59 IST #


  5. Comment by hari (blog owner) on Thu, Jan 5, 2006 @ 15:32 IST #
  6. I think it's a grey area - for instance, this ebay sale is perfectly legal:linkbecause altho it doesn't work, he's up-front & honest about it being broken.So possibly the EULA saying it has faults is considered enough notice for it to be legal.Altho since you don' get the EULA until you've already bought the product, I think that sways the balance in favour of the consumer.

    Comment by Dominic (visitor) on Thu, Jan 5, 2006 @ 16:58 IST #
  7. Dominic, I just fixed your link so that it isn't too long to break the page layout.Yeah, I agree that it's a grey area, but I think lawyers exploit this to the fullest while the consumers aren't aware of where they stand. I think that should change.

    Comment by hari (blog owner) on Thu, Jan 5, 2006 @ 17:05 IST #
  8. And also what is the applicable law in any case? They word their clauses so vaguely that it suits them to find loopholes if possible.They do this on purpose for precisely the reason you stated - but surely this could work both ways? So, we could use loopholes as well... I wonder how this would turn out in a court of law, because a certain statement might be twisted to suit both sides - that would be interesting! ;) They should put a stop to this though, and start making EULA's more specific.Hari, no problem! :D

    Comment by J_K9 (visitor) on Fri, Jan 6, 2006 @ 17:29 IST #


  9. Comment by hari (blog owner) on Fri, Jan 6, 2006 @ 18:52 IST #

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