EULAs, terms of use, and terms of service agreements attempt to regulate user behavior. They state how a consumer can and cannot use certain products or services. They tend to severely limit a consumer’s rights and give the owner or vendor of the product or service many rights. If a consumer fails to follow the terms of these agreements, an owner can try to sue for breach of contract. If a consumer follows the terms of these contracts, then he or she is regulating his or her behavior in a manner that is most likely advantageous to the owner or vendor of the product or service.
Consumers need to take the time to read these types of agreements. They are not all created equal. It would be a mistake to think that these agreements simply govern the intellectual property rights of the owners of a product or service. Although many EULAs and terms of service do this, some also have unexpected terms. For example, some of these terms include language that would allow the vendor to install additional software onto a consumer’s computer system. The additional software could be used to learn the consumer’s internet habits in order to supply targeted advertisements. These types of contracts also can have terms about additional licensing fees or deeply buried upgrade, support, or maintenance fees. For applications used on mobile computing devices, such as smartphones, these types of contracts also might grant the application access to other types of personal user data stored on the device. Reading the EULA or terms of service agreement is the only way for a consumer to know what rights he or she is giving up.
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A 2010 study reported that more than half of the study’s participants spent only 8 seconds reviewing EULAs.27 A 2017 study found that 97 percent of people ages 18 to 34 agree to terms of service contracts without reading them at all.28
Consumers should look for some of the following terms when reading EULAs or terms of service contracts:
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A consumer should exercise caution if a contract says that products or services are provided “as is” or use is at the consumers’ “own risk.” This means that the seller is disclaiming several different consumer protection warranties.
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Terms in a contract that state that consumers must file lawsuits in a certain state or county in that state are called forum selection clauses. Contracting parties use forum selection clauses to control questions about jurisdiction. They also use them so that they can litigate lawsuits in front of a familiar court. It is the legal equivalent of “home court advantage.”
Consumers must think about what they are willing to agree to, or even give up, in order to use a particular product or online service. They must balance their need for the use of a product or service with other contract terms that might place them, or their data, at a disadvantage.