The Personal and Social Implications of the End User License Agreement


Simon Krauss
Deputy General Counsel

Mar 6, 2019

As in-house counsel, I often read and write online licensing agreements for software. These agreements go by a variety of names, such as Terms of Service (ToS) or End User License Agreements (EULAs). These are the agreements you scroll through (without actually reading) and then click the “I Agree” box, thus legally binding yourself to something you didn’t take the time to read or understand in order to get something you want quickly.

Not Your Fault

Don’t feel bad about not reading EULAs. It would take a significant amount of time to read every one of the agreements you encounter. Also, many of them would require you to go to law school to understand them! And even if you didn’t like the terms of an agreement, your only options would be to try to negotiate better terms (best of luck with that!) or not use the software or service. Besides which, if you’re getting the software or service for free, you may ask, “Who cares?” You should! Even if the transaction doesn’t involve money, it isn’t actually free. You may not be giving up your money, but you are giving up your legal rights.

You may not care about some of those rights, as they often may not impact you too seriously. But one serious development I do see coming up more often is when a company reserves the right to change the agreement at any time by posting new terms on its website. If you continue to use that company’s software, then you automatically agree to the new terms. This means that it’s possible that a free app you downloaded one day wouldn’t be free the next day—and you wouldn’t know it unless you compulsively checked the website to read what you didn’t read the first time.

Sometimes You Can Win in Court – But You do Have to Go to Court

It’s not all bad in EULA land. In some instances, the court will have your back. Because EULAs are non-negotiable form agreements, they’re considered “adhesion contracts.” Generally, courts won’t allow the dominant party (the one that wrote the adhesion contract) to enforce an adhesion contract term if the court considers it “unconscionable”— that is, generally, and as a simplification, if the contract term is unfair to the weaker party. But that also means you have to sue and spend time paying for your case.

So Who is Going to Change the EULA?

Although there may be little incentive for lawyers to change EULAs on their own, there are incentives for the lawyer’s clients. Companies invest a lot in their customer experience. EULAs are clearly not part of that investment, but they should be—after all, the EULA is where the software or service is purchased. Companies are in a position to challenge their legal counsel to draft EULAs that work to enhance the customer experience. Outside of a sea change in the law, this may be the only way EULAs will change.

At Kyrio, I work hard to make our agreements as simple as possible. I have also launched my own initiative with lawyers and designers to develop contracts that are written in standard English. Subscribe to our blog to learn more in the future.