, 2005-10-24
Suppose you are setting up a website to deliver the latest software, product, or service. Before the site goes live, you go to your lawyer (of course you do, don't you?) who reviews your online privacy policy, your online security policy, and your policy regarding collecting information from or about children. Your lawyer reviews the site overall for anything that might be considered or interpreted a fraudulent or deceptive practice. Of course, if it were up to lawyers, the only content on the Internet would be in the form of disclaimers.
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Second, EULAs aren't conventional contracts. A standard contract involves a negotiation between the parties over the terms. EULAs allow for no negotiation, the user has to take them as-is or leave them. They're what's called a contract of adhesion. The law applies different standards to a contract of adhesion to compensate for the fact that one party has no say over the terms. The FTC is merely arguing that certain terms of the EULA in question fall into the class of unreasonable and/or unconscionable terms that aren't valid in a contract of adhesion.
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Link to this comment: http://www.securityfocus.com/comments/columns/365/32592#32592