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If the Online Notice is Too Complex, Does That Open the Door to Tort Claims?

03 September 2010

If the Online Notice is Too Complex Does That Open the Door to Tort Claims

In an opinion piece appearing in today's Wall Street Journal, available here, Eric Felten describes an ongoing case in which a tort claim seeks to escape the limitation of liability language contained in an End User License Agreement (EULA):

A federal judge in Hawaii ruled last month that a man claiming to be addicted to a videogame can sue the game's maker for gross negligence in not warning him he could become a joystick junkie. Craig Smallwood alleges in his lawsuit that, as a result of playing the online game "Lineage II," he has "suffered extreme and serious emotional distress and depression, and has been unable to function independently in usual daily activities such as getting up, getting dressed, bathing, or communicating with family and friends."

Felten continues:

Silly as the suit may be, it isn't without legal ramifications. Steven Roosa, a lawyer doing research at Princeton's Center for Information Technology Policy, sounded almost giddy this week at the prospect that a court might chip away at the enforceability of End User License Agreements, or EULAs. These software license agreements often radically limit how, and for how much, customers can sue if they feel harmed by an electronic product.

Mr. Roosa cheered on his blog that the judge in Hawaii has opened an avenue for escaping the tyranny of these one-click, liability-limiting contracts. He called the judge's refusal to throw the case out in its entirety a "stunning defeat" not only for the maker of Lineage II, but for the whole business of locking customers into contracts that consist of miles of electronic fine print that hardly anyone ever reads.

Felten observes in his Journal article that "[n]o doubt we do live in a time of kudzu legalese, with weedy contractual tendrils crawling into every electronic transaction. It's alarming to think about everything we sign off on these days, with endless demands to click "I agree" as the non-negotiable price of entry into our electronic worlds. Alarming, because few of us ever peruse the legal documents to which we so regularly and glibly affix our electronic signatures."

Last April, the British retailer Gamestation set out to prove the point by including in its boilerplate some Mephistophelean contractual language: "By placing an order via this Web site," read the clause, "you agree to grant us a non-transferable option to claim, for now and for ever more, your immortal soul." In just one day, some 7,500 customers "agreed" to hand over their souls for a mess of virtual pottage. (emphasis supplied)

In the context of privacy policies, two weeks ago I was a panelist at the Privacy, Identity and Innovation 2010 conference in Seattle in the session "Competing on Privacy: Trade-offs, Transparency and Trust."  At the session, I observed  that privacy policies often are dense because companies need to protect themselves, but that alongside the legalese of the privacy policies can be layered notices with simple declarative sentences and even videos of people explaining in plain English how personal information is collected and used.

A blogger in the Seattle audience yelled out at me for admitting that I draft lengthy privacy policies, and I tried to get this concept across, explained in today's Journal article:

The proliferation of annoying and obnoxious license agreements has been driven, primarily, not by companies' desire to abuse their customers, but by a need to keep their rather more litigious customers from abusing them (and the legal system). As Jonathan Zittrain, who teaches both law and computer science at Harvard, puts it, "EULAs are, for most companies, a shield not a sword."

(I did not admit nor do I mean to suggest that the policies I draft are "annoying and obnoxious," just lengthy.)

So it is a given that legal notices almost inevitably will be complex but supplemental, simplified notices, even video notices, alongside the legalese will better inform consumers.  And it should thwart tort claims where a plaintiff claims "I had no idea this could be the result of my interaction with the web site."


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