Evolving EULAs
I’ll be writing some mini-reviews of recent articles andessays. If you have something fresh that you’d like reviewed, e-mail me (kching@regent.edu).
Today I’m reviewing Setin Stone? Changes and Innovation in Consumer Standard-Form Contracts, 88 N.Y.U. L. Rev. 240 (2013), by FlorenciaMarotta-Wurgler of New York University School of Law and Robert B. Taylor.
Set in Stonestudies the evolution of End User License Agreements (EULAs) by comparing their 2003content to their 2010 content. The article provides a wealth of dataabout EULA development based on company type, product type, term type, word count, “bias”toward seller or buyer, innovative terms, legal representation, and impact oflitigation on terms.
The article focuses on changes in EULAs’ relative buyer-friendliness.For example, a EULA that has changed to inform buyers of their right to return aproduct has become relatively more buyer-friendly, but a EULA that has changedto allow a seller to remotely disable a buyer’s software is relatively less buyer-friendly.
The article concludes that EULAs are becoming relatively lessbuyer-friendly. Surprise!
Data provides the great joy of quibbling over its meaning. Forexample, is a EULA that informs buyers they can return a product really buyer-friendly?Such notice may render the EULA more enforceable, which actually may be more seller-friendly.But quibbling aside, Set in Stone makesa major contribution simply by giving us a treasure trove of data.
A few thoughts on this important article:
More data, please:Set in Stone measures EULAs’ relativebuyer-friendliness, but it acknowledges that it lacks the price information we wouldneed to determine whether EULAs are increasing welfare or merely redistributingwealth. This is the big question, isn’t it? Hopefully some enterprising, empirically-mindedscholar will relate Set in Stone to therelevant pricing data and tell us whether we’re better off now than we were tenyears ago.
Democraticdegradation: Set in Stone doesprovide evidence of the democratic degradation described in Margaret Radin’s Boilerplate. Set in Stone notes that EULAs increasingly include terms that allowsellers to control buyers’ performance through technological means as opposedto litigation. For example, some EULAs allow sellers to remotely terminate abuyer’s ability to use software when the seller deems the software has beenmisused. Isn’t this like a liquidated damages clause that lets the sellerunilaterally determine the buyer has breached andprovides the buyer’s ATM pin number? Should buyers have their day in courtbefore sellers enjoy their remedies? Even if buyers were receiving pricediscounts in exchange for their legal rights, we might think such seller self-helpmechanisms are contrary to our basic political arrangements.
Lawyers as productengineers: Set in Stone suggeststhat EULAs are more susceptible to innovation than other contracts. So, ifcontracts are product components, perhaps lawyers can engineer better products.Entrepreneurial lawyers could identify EULAs containing inefficient terms and revisethem to create economic surplus. Lawyers could be trained to identify and eliminate EULA inefficiencies. In-house lawyers could be transformed from cost centers toprofit centers. And all without doing any math! Well, we might have todo some math.
[KC]
[Image by James Provost]