No one reads the terms of service. Lawmakers want to fix that with 'TLDR' bill
washingtonpost.com
washingtonpost.com
Germany has an explicit rule like that (§ 305c BGB): terms that are so unusual that the counterparty didn't have to expect them are null and void, and any ambiguities are interpreted against the side using reusable T&C's. Terms are further invalid (§ 307 BGB) if they unfairly disadvantage the other party against good faith etc.
The real meat starts in 308 and following, explicitly banning many terms - for example arbitration requirements (309 item 14).
Edit: Completely forgot - your competitors can also sue you/get an injunction to stop you from engaging in unfair business practices.
Legislation should be written so that litigation wouldn't be required to uphold consumer rights.
Imagine similar concept to GDPR, but for consumer rights that must be adhered to, or be fined. You cannot sign away your rights under GDPR, and you automatically get those rights by virtue of being based in Europe.
Weirdly enough, this somewhat works in Germany. Sure, I know Lawyers who say that pretty much any T&C has terms that are invalid under this law but society has not collapsed, companies don't get sued constantly and the most egregious terms get ruled against. Sounds nice?
Of course, Germany/EU is a different legal environment than USA so this does not apply 1:1.
Where I live now, Hong Kong, even oral contracts have value, if it's written you re gonna give your kidney, you better book a surgeon. We cant regret a contract even the first week (they tried to pass a bill on that, it was rejected because inconvenient for companies...).
Surprisingly though, it makes for much more careful people, who care for, and respect, contracts. In France, you dont even have to pay rent, in HK, it's a kick in the ass and your stuff thrown aways a day after the missed deadline.
It's just that when we're talking about consumer contracts for such small quantities of money it's hard for a consumer to justify fighting anything at all. In a lot of ways this is the primary problem, not the contracts themselves. You'll never stop companies from trying to do bad things, but the way they can siphon, say, 50 cents worth of annoyance and bad practices away from 100 million people is the relatively new thing that we have no way of handling in our currently super-heavyweight legal system. We don't have anything suitable for dealing with that. Even a class-action lawsuit is hard to justify in such a case, the lawyers would eat 250% of the winnings.
I would say that this is hardly even worth worrying about, if the biggest problem someone has is 50 cents extra to a company you are living a charmed life, except that it at times feels like it's every single company I deal with doing this to me, so it adds up to something quite large. Everybody is getting shaved like this by a large number of companies. But it's hard to deal with, there's no single large locus you can focus on.
a) much lower tolerance for this kind of thing - if a company does this, people will consider them scammers, so there is a high cost to repeatedly trying tricks like this
b) the Verbraucherzentralen, consumer rights organizations that can sue on behalf of all consumers (not in the sense of a class action suit, but in the sense of making a company stop an abusive practice). They also generate press releases, leading to the above-mentioned reputational damage.
I'm still disappointed that obvious scams (e.g. hiding a subscription that very few customers would knowingly agree to in the fine print) are handled through this system, instead of the criminal justice system. You still need the civil system for the less egregious cases, but if you send the obvious ones to jail, fewer will try to "dance around the line".
Edit: Completely forgot - your competitors can also sue you/get an injunction to stop you from engaging in unfair business practices.
It can be pretty subjective, but it often gets clarified with enough common law precedent (which can be amended with a new law if it becomes abused/unfair/odd).
The opposite is also interesting to observe: In common law countries the written law also becomes more and more fine grained limiting jurisdical law making.
It does create uncertainty, and sometimes clauses get declared invalid years later and customers get bitten by statutes of limitations if they didn't sue themselves, but these cases are also really expensive for the companies so it's in their interest to not get too creative.
In practice, it seems to work really well. I'm always astonished how much more on edge I have to be in other countries when agreeing to anything. In Germany, most of the "legal scams" (e.g. subscriptions hidden in fine print) don't exist, or are really easy to get out of.
Sites would then need to decide how many variations to enact, knowing full well every extra one reduces signups.
I'd rather have "ideological" bills that explicitly say companies can't take the piss, empowering judges to throw the book at them with liberal interpretations.
Note I'm not completely contrary to a legal intervention in the matter (the EULA concept must die); just that it makes more sense to put in law that companies must not take the piss, not that they can take the piss as long as they follow the letter of some standard form. Then they can absolutely follow with standard guidelines that are somewhat advisory, as a way to speed up enforcement; but it's important that the law establishes overall principles, so that it's more future-proof.
If I give you a software copy with non-standard license, courts here won't uphold such licenses if you don't point out it's non-standard and in what ways. Because the consumer can't be expected to read and understand every legal contract they have to sign. They aren't lawyers, after all.
Software development is the side where I'd expect the most slow-down (rather than EULAs) but if anything, I think standardisation removes friction from innovation — I'm much more likely to adopt your lib for example if you tell me it's MIT licensed rather than something you've written something a bespoke library for.
Similarly, imagine if a new start-up creates a new Alexa competitor, say — I'd much prefer if they said "we treat your personal data as standard, under this commons licence. Then, we also have some niche requirements that are A/B/C and this is how they explicitly work", rather than pages long TOS that I need to go through with a fine-tooth comb to see if anything has been snuck in.
* ban mandatory arbitration
* ban “tax recovery charges” on top of advertised prices
I think hidden charges are probably prohibited in a separate law, but basically if you see the price that's the price you pay.
Actually, here it is https://www.gesetze-im-internet.de/pangv_2022/BJNR492110021.... - Google Translate:
(1) Entrepreneurs who offer goods or services to consumers or who advertise goods or services to consumers by stating prices must state the total prices. [...] (3) If a price is broken down, the total price should be highlighted.
(And that "should" is a "shall")
My old boss described BGB as a masterpiece, and the deeper I dive in German bureaucracy, the more I agree.
Doesn't this law prevent startups from developing innovative business models even when they are being upfront about it?
> (1) Provisions in general terms and conditions are invalid if they unreasonably disadvantage the contractual partner of the user contrary to the requirements of good faith. An unreasonable disadvantage can also result from the fact that the provision is not clear and understandable.
So if the novelty of the startup is an unreasonable disadvantage to the customer, it would be illegal. Which sounds good to me.
https://www.legislation.gov.uk/primary+secondary?title=Unfai...
Also a general legal principle that the terms of a contract are interpreted in a way least favourable to the party making the offer where there is doubt as to the interpretation.
So I guess what I'm saying is there should be a "standard contract" based on common sense that click though providers are deemed to be entering into, and anything else slipped in is invalid.
As one example, which is a quite similar case, the standard lease contract for apartments in Germany is 4 pages. In the USA I’ve had between 21 and 27 pages so far.
And, as long as it doesn't breach any explicit laws, that condition is equally enforceable.
The German system above appears to specifically address that issue with US law.
Parsing 20+ pages of legalese, when it could be shipped as a diff instead, is simply inefficient.
That isn't true; if the court concludes that no reasonable person would ever have knowingly agreed, it will find that the condition is unenforceable. It's a real standard, but I don't recall the relevant technical terms.
Obviously it's hard to meet that standard, but breaching an explicit law is very much not a requirement for unenforceability.
edit:
https://en.wikipedia.org/wiki/Williams_v._Walker-Thomas_Furn....
> when a party of little bargaining power, and hence little real choice, signs a commercially unreasonable contract with little or no knowledge of its terms, it is hardly likely that his consent, or even an objective manifestation of his consent, was ever given to all the terms.
> In such a case the usual rule that the terms of the agreement are not to be questioned should be abandoned and the court should consider whether the terms of the contract are so unfair that enforcement should be withheld.
Point 1: You're probably yourselves vs a professional management company / large property owner. They obviously bring more resources and experience to a legal case than you do, in addition to simply having more time to engage in one.
Point 2: That's assuming you can even take the case to court, and didn't sign away any disputes into arbitration.
I don't think that matters at all; if you have a term in your contract that a court will find unconscionable, an arbitrator is... shall we say, extremely likely to find the same thing.
You're also free to haul the arbitrator into court if they make an egregious ruling. The fact that you were subject to binding arbitration and the arbitrator awarded your firstborn son to the company isn't going to be any more convincing to a judge than the alternative fact that your contract clearly states you're giving up your firstborn son to the company.
That actually works against them in court, especially in the particular scenario being discussed.
He's a good, law abiding fellow, so he did it. It was the last thing he needed to deal with on top of all the stress of moving. I would have just ignored it, let them take me to court if they want.
Generally, contracts on the US where there is one party who writes them and another party who doesn't get to edit them (leases, employment contracts, etc.) have a lot of case law about what can and can't be enforced on the party who doesn't have authorship control. Contacts where both parties are writing them have a lot more freedom to screw a participant, but also generally savvier participants.
I don't feel its unreasonable to read through a dozen or two pages of contracts for something like a rental lease that will eat up 30% of your income for the next year; and I've never felt that my city/state is in dire need of improving the situation. The problem with online service terms is more-so that: they aren't standardized, they all say different things, they oftentimes claim things that aren't legally enforceable, they're usually a UI afterthought... they're just bad. We do need some kind of legislation for those. I don't feel that requiring a summary is the answer.
And furthermore, it's a common misconception that something is 'legal' to stipulate just because they've seen it in their contracts before. People put unenforceable crap in contracts all the time because 9/10 people will just believe it's enforceable and go along with it.
Notice how anything related to wealth management (contracts, financial concepts and practices, etc) is rarely (if ever) included in compulsory schooling.
This is by design.
So we ended up with Western education systems that produce intellectuals who conceptually despise wealth management, ensuring education remains thoroughly detached from the actual levers of power. That suits rulers just fine.
https://www.edweek.org/teaching-learning/data-most-states-re...
Given the number of different templates floating around tailored to most individual states, that’s either an extreme coincidence, or there is shared ownership, management, or legal representation between the different apartment complexes.
I won't swear that this is correct, or that it still works that way, but that was my impression.
I'm also sure that a lot of people still rented apartments on handshake, unwritten, or under-the-table deals for a variety of reasons.
https://eforms.com/rental/tx/texas-standard-residential-leas...
I mention this because it's sort of an example of it "having been achieved" in the past, albeit not in the lawmaking sense.
Either what you put in the contract is a law, so it is effective no matter if you write it or not, or it isn't and in this case, there is a high chance it is considered abusive and therefore not legally enforceable. In fact, you might as well not write anything at all! If someone lives on someone's property and pays money in exchange, there is an implicit contract with standard clauses between the two parties. I think the only additional right a written contract can give a landlord is to increase the rent, but by no more than the inflation rate.
Garage access is only an issue if you pay for it. If you pay for a garage, the landlord has to ensure you have access and depending on the type of contract, ensure you are the only one with access (re; shared vs solo garages).
The Pet Clause thing only concerns big pets. Anything the size of a normal house cat or smaller (except actual house cats and exotic/unusual pets) requires no special permission. If larger pets are banned, this is only valid if there is a contract condition to allow the tenant to get special permission to have a cat or dog. A total and general ban of all pets is considered too disadvantageous for the tenant and thus not allowed. When asking for permission, the denial must have an explanation attached. "Pet can cause damage" isn't allowed for example, since the owner could just buy a pet insurance to cover any claims. Noise and dirt aren't either, since the landlord can require the owner to take care of that. Basically the explanation of why you deny a pet has to be something that the owner doesn't have the power to change easily, such as that the landlord is allergic and living in the flat above you or similar things.
This kinda stuff is usually added at the end of the template contract, there isn'T a lot to read so they tend to be obvious.
When you buy something at Wal-Mart, your sales contract is the UCC. When you order something online or by phone, and neither of you specify details of things like form of payment, warranties, shipping... those details are filled in by the UCC. And it's called "uniform" because all of the states have individually codified the same default contract into their state laws.
https://www.law.cornell.edu/wex/table_ucc
This uniform contract is also where several warranties arise that people take as a given precisely because the UCC inserts them into every sale that doesn't disclaim them: the warranties of merchantability and fitness for a purpose. Those are your guarantees that when you buy something from someone, the goods will do the thing they're supposed to do and there's nothing significantly wrong with them. It's why you have a right to a refund/return when the thing you bought is broken, or doesn't do what it says it does.
This makes even more sense as software becomes a key component of more products.
The schoolhouse rock version of how a bill becomes law is basically pure fiction at this point. Certainly at the federal level I'm not sure a single so-called legislator is competent to draft a bill. Occasionally they will have their staff draft some showboat bill that will likely never even pass committee, but almost all the bills that become law are drafted by some interest group or other, who then hire lobbyists to find a "legislator" willing to rubber stamp it.
It's surprising that it's not more of a well known fact that the USA isn't even remotely a real popularly representative democracy, given how completely obvious it is to all but the most casual observer. Princeton even published a study on the subject[1].
[1] https://scholar.princeton.edu/sites/default/files/mgilens/fi...
And that study is false; what it actually shows is that elites and average citizens agree on most things that pass, not that only elites approve of them.
https://www.vox.com/2016/5/9/11502464/gilens-page-oligarchy-...
Remember, when you come across some cynical information that shows the average person is a sheeple/NPC/etc, it’s not true! Average people are usually right.
In those cases where average people and elites do disagree, such as border security, the elites reliably get their way.
And yes I’ve seen the shoddy attempts to refute the Princeton study. They’re unconvincing.
https://www.clearygottlieb.com//news-and-insights/publicatio...
> Article 12 – dealing directly with the acquisition and disposition of interests (including security interests) in “controllable electronic records,” which would include Bitcoin, Ether, and a variety of other digital assets. Under Article 12 and associated amendments to Article 9, a party may perfect a security interest in certain controllable electronic records by obtaining “control” of such records. In addition, Article 12 confers an attribute of negotiability on controllable electronic records – a good faith purchaser for value who obtains control (a “qualifying purchaser”) takes its interest free of conflicting property claims.
If it is a EULA, a rental contract on an iPad, or an employment contract delivered through DocuSign then I can't strike or amend any clauses I disagree with.
I think that's a mis-interpretation of 'meeting of minds'. The point is that when you sign the contract both parties are in agreement, but if either party is not happy with the agreement then they can either alter the terms until everyone is happy or they can simply not accept the agreement.
You could try suggesting changes to the agreement (e.g. with google when you sign up for an account), but they'll almost certainly just say they're not interested in making such an agreement. Perhaps if there was a few million dollars on the table they'd be more interested in adjusting the terms, but as it is they're offering a largely free service so most people have very little bargaining power.
Why not produce such a set of rules for consumer protection?
This is usually the consumer (protection) law isn't it? That sets up expectations and obligations between consumers and manufacturers of such items - everything from warranty periods to allowed discrepancy and defect rates.
TOS/EULAs are there usually to modify and take away rights from consumer laws.
I also see no sense in reading through these contracts if you’re not a lawyer. You will probably miss or interpret wrongly a sentence or two. And this might be the most critical part of the contract.
Let’s stop this madness that newsletter subscriptions and printer cartridges have a license and you should employ a lawyer to read it. This is all shady business. Let’s focus on building bridges, writing books and growing crops. This is what human being need, not million of law firms, accountants and other useless jobs.
I grew up in Norway, and now live in the UK, and one of the big shocks to the system on moving to the UK was that in Norway even most employment contracts - contracts which has a very substantial impact on peoples lives -, are often a page or less. Exceptions are very senior staff and sometimes multinationals who don't know better (half the time most of their extra verbiage is null and void due to legal restrictions in employment law). The most complex Norwegian employment contract I had was a couple of pages, mostly just spelling out terms which were covered by the law anyway.
The reason is simple: There are presumed legal defaults for almost everything, such as duration of notice periods (typically 3 months) and other terms, and except for clauses that have little impact on the employee the defaults are good enough that few companies want to go above and beyond, and trying to deviate the other way (offer less than the default; such as e.g. a 1 month notice period) is often difficult, sometimes impossible, and almost always requires consideration that makes it unattractive (before I moved from Norway I'd never once had an employment contract where someone tried to pay me less than 3 months notice, but I had one where they wanted to retain the right to pay me in lieu of notice)
The irony is that while Norway is often seen as complicated for businesses, in this respect things are easy unless you try to make it hard on yourself: You can draft a valid employment contract yourself in less than a page. A well regulated environment can reduce a lot of friction even if the regulated terms are not exactly how you'd like them to be.
But for employment the importance is at least significant enough that you can expect people to read the contract even if it's longer.
For things like subscriptions etc. there's even less reason there can't be reasonable defaults and why you can't make it hard or unattractive to deviate from those defaults, such as by requiring the contract to offer concessions in return.
That's what TOS feel like today. Even if you did read them, you probably need an attorney to fully comprehend what you are accepting. The agreement was created by one or more attorneys, sometimes a highly paid law-firm. The asymmetry in legal knowledge between reader and author is massive.
Perhaps the metric should be that an agreement should not require an attorney for interpretation by, say, the average high school graduate.
Hey, maybe that's a way to improve our system of education! Can you imagine what an agreement would look like if that was the metric?
With home purchases (for example), the terms are usually standard in the state. Why the heck does every single web site need its own terms?
also, residential real estate ain't the example you want to use! True, 99% of it is standard, but every freestanding home differs substantially in: - what's included/excluded, e.g. furniture - seller disclosures including the history of maintenance, special needs, etc. - title search and property maps - environmental issues (soil, etc) - hyperlocal regulations affecting that property, incl HOA rules (apartments are simpler but then HOA rules are more complex)
what might work is to start with a gigantic-but-standard ToS, and then the per-service ToS is just the diffs and additions. Many legal docs use this method, including residential real estate.
> (E) Historical versions of the terms of service and change logs.
This alone is a big improvement.
https://trahan.house.gov/uploadedfiles/tldr_act.pdf
Edit: adds link
What if, instead of signing up for a service myself, I paid my neighbor's 11-year-old kid a few Christmas cookies to sign me up, while I washed my car? Neither I, nor any legal adult, was around when she was skipping past the legal junk, or clicking "I agree" when required.
The standard contract should reference that current framework of agreement, and fill in only the variables that matter, possibly with an appendix of penalty fees if applicable. (E.G. like https://www.gsa.gov/travel/plan-book/per-diem-rates has a cost metric for meals and room rates for each given area; notably this list of fees MUST be from a 3rd party or government source. It must be common use.)
A list of expected payments (quantity and date), transfer events, etc, as well as a summary for anything remotely complex. It should nominally fit on one single sheet of standard paper (letter or A4).
An itemized bill of incidentals E.G. for room charges / etc would be a different type of expense, that would be an add on of additional services.
https://digital-strategy.ec.europa.eu/en/faqs/contract-summa...
As a consumer, I would really like to see something like this bill. I would also like there to be a standard by which I can say to my browser, "I don't want to be bothered by any site who only wants to X,Y,Z" and then be prompted only when the site wants more than that. This requires cooperation between a standards body and the legislation being produced and would be an actually huge win for the cognitive load of the consumer.
Those shitty cookie/GDPR prompts aren't actually compliant with the law. They need to either A) give an explicit single-click opt-out, or B) opt-out by default. If the pop-up requires you to click "customize" then untick a list of ticked-things then click "accept", that violates the GDPR and the fault lies with the company who is breaking the law, not with the law itself.
https://news.ycombinator.com/item?id=33462658
> "Virtually every modern-day service comes with a gargantuan boilerplate contract that governs everything from privacy policy and liability indemnification to which one of your children you agree to sacrifice. Since you are reading this online, you have likely hit AGREE on hundreds of these without reading a word of them..."
Article is from January 2022, does not seem to have any recent updates.
Voters exist to reinforce positive behaviors in politicians, and politicians exist to exhibit those positive behaviors. You can't teach someone with punishment alone.
if you read ericgoldman's blog, you already know this, but various factors affect whether a contract is considered formed, including:
- whether the 'agree' text appears on the user's screen
- the text of the button ('continue' vs 'agree')
- whether the tos link is before or after the button
(I'm not a lawyer)
This will only have meaningful enforcement on countries which already defend their citizens from corporations.
I don't care what the terms of service are for 99.9% of the things that I do. You don't want me to download your videos? Ok, don't care.
Somehow I think this is trying to solve a symptom rather than a problem.
We have far too many contracts which are presented in scenarios with huge asymmetry of parties-- both in terms of "how much flexibility they have to negotiate and back out" and "how much legal knowledge and resources they can marshal to get a good deal." There's a subtle difference between the armies of lawyers negotiating the Microsoft-Activision deal and a bank presenting a 15-screen-long account agreement written well above the average reading level as a fait accompli, but I'm not sure I can quite put my finger on it.
There's also the matter of rework and iteration power. A typical human might open 10 or 20 bank accounts, for example, in their lifetime, but a bank will go through tens of thousands every year. This gives them both the opportunity and incentive to be constantly re-iterating and optimizing their strategy, allowing toxic terms to spread wildly from industry to industry. Remember when arbitration or anti-class-action clauses were rare and exotic?
These factors mean that well-lawyered, rich parties are usually in a position to ask for the moon. Most people won't balk, and they can start asking for Phobos, Deimos and Ganymede in the next few years. This might be a viable negotiating tactic, except that an important balancing factor is missing. We can hardly rely on the courts to help prevent abuse. A wealthy party can use the threat of a suit as a bludgeon-- "finish this disputed obligation or we'll sue; even if you win it's gonna cost you ten years and $300k to get your way", but many people can't afford to effectively use the courts to challenge toxic, socially destructive, misleading, or illegal contract terms. If there isn't big money in there, you're not going to get help on contingency. Class-action suits (when they're allowed) are a limited remedy-- they rarely end with a strong "nobody do this anymore" precedent or establishment of wrongdoing; they just serve as a "no wrongdoing was admitted" settlement, effectively liquidating your grievance in terms of dollars.
I'd love to see all permissible contracts be published in Mad Lib format in a standard government document. Nothing else is valid, no matter what story you can craft of "meeting of the minds." This would massively streamline the legal practice-- there'd rapidly be very little new under the sun to argue, so the case law could be documented and explained at a level lay people could understand.
This would also make for a huge opportunity for oversight-- if someone wants a new clause to be added to the Standard Contract Book, it has to go through a review and comment process, which could easily become a public shaming moment: Why is company XYZ trying to introduce an anti-disparagement clause in the standard employment contract? What do they want to block and hide.
I notice a lot of puns and memes make their way into act names in the US. I never imagined they'd take an ancient internet meme (tl;dr) and come up with an official sounding wording for it.
Also and ironically, many bills aren't read by lawmakers. Maybe they're sympathetic.
If legislators wish to ease compliance, enforcement, and awareness, they will winnow down this corpus on an annual basis by removing, deleting, merging, and summarizing.
This is false. Some of us actually do, and I imagine most enlightened HN readers do as well.