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Contracts: Company Insurance For The Future
batobin writes: "This article gives a new perspective on how contracts work in the technology business. In the past, contracts and signed agreements have been used primarily to protect the individuals involved from legal action. They are now being used like a spider web. After they catch somebody, their purpose is to keep them subscribing/paying/buying their stuff, even if you don't want it anymore."
I refuse to sign or accept a service contract any more. Mostly just because I don't want to be stuck with the service for any longer than I have to if I decide I don't want it any more. For example, I can add 500 minutes to my Sprint PCS service just by signing a year contract, but I have changed my plan a couple of times in the last year. Hell, the reason I went with Sprint PCS in the first place is because they didn't have a contract.
One that really got me was the Flashcom contract. A 5 page contract for DSL service that has goodies like:
These were revised on 8/21/2000. 8 months ago when I was looking for DSL, the contract said that at the end of 2 years, I would be automatically renewed for another 2 year contract unless I notified them in writing 1 month prior to contract termination. No way! Now it is month to month after 2 years and not quite as bad.
Finally, I disagree with any legislation, etc. to keep companies from doing these contracts. If you want to do business with them, you agree to their terms. If you don't like the terms, you don't do business. I think people will eventually get pissed off enough that companies will start losing business and be forced to rethink their contracts. Perhaps that is why Flashcom changed their contract...
But they miss the other major reason for contracts: getting you in the door with subsidised equipment and then trying to make sure that you eventually pay for it.
IMHO, that's fair enough. If the contract is geared to making sure that they don't loose money by having people sign up, get free stuff, then cancel immediatly.
Contracts are starting to go beyond that now. In some cases, canceling costs way more than just continuing to make the agreed upon payments. The company actually does better if they provide crappy service after you sign. That way, you stop using it, but continue paying.
> you would write half of all contracts with the companies; you don't, and you aren't.
Sorry, but some of us DO write contracts that we sign. At my current job I wrote the full 100% contract. After I had been hired, I gave them my contract, the company then sent it off to their lawyer, made a few tweaks, I reviewed it, and we were set.
Reading and writing contracts isn't THAT difficult! Heck, the founding fathers were lawyers and they never went to law-school.
> It may be argued that you don't have to sign anything, and that is true;
Yes, that is why I refuse to sign a driver's license. I am not going to waive my rights* to freely travel. Know your rights! Excerise them!
Remember, If you don't READ _and_ UNDERSTAND what you are signing, then don't sign it.
Cheers
* Court cases for those interested: Right to Travel vs. Permission to Drive
So we paid out for two more years for useless upgrades and tech support which we couldn't use as we weren't at the latest version (another nice clause) :)
Should have been more creative. It IS the same box, it's just that we replaced the case, cpu, memory, drives, power supply, motherboard, and display card all at once. The keyboard, however, is original.
f you were in an equal bargaining position with companies - you would write half of all contracts with the companies; you don't, and you aren't.
Agreed 100%! I would go further and say that it's not even negotiated most of the time. For proof, go to Radio Shack and look over the contract for new cell service. Now, strike the clauses you don't like and ask the salesperson to have an authorized representative of Tandy initial the changes and sign at the bottom. What? The contract isn't negotiable?
"In the past, contracts and signed agreements have been used primarily to protect the individuals involved from legal action. They are now being used like a spider web."
:)
Did I miss these 'good old days' when contracts were only used for everyones benefit ?
Contracts have always been written solely for the advantage of the company which created them.
The only difference is that 'Joe Public' is now being exposed to contracts (software, mobile phones, ISP's etc), in many cases for the first time - and people are getting burned more often.
Businesses have had this problem for years.
My personal favourite was a 4 year 'tech support / free upgrades' contract for some software we had. After year 2 the tool was upgraded significantly and our Unix box wasn't man enough to run the new version - but there was a clause preventing us from transferring the software to a new box.
So we paid out for two more years for useless upgrades and tech support which we couldn't use as we weren't at the latest version (another nice clause)
We were more careful after that.
Normally, if I buy a contract for several years (say, a car lease), I have a reasonable expectation that their half of the contract will still be good at the end of that time (that is, the car will still work pretty well). Here, if you sign up for a 56K connection for three years, remember that 56K will be like 2400 baud by then.
--The basis of all love is respect
This whole article seems to focus on the negative side off there contracts and I don't really agree with that. Sure; when taking the 28k8 modem into consideration it is bad when you sign that to last for 6 years and after 5 years you still run on 28k8. Or is it? What happens if that speed changes? Lets say that I'm very happy with 28k8 (I'm happy with my 56k6 at the moment so it IS possible :)) and I'm not interested in all those upgrades. Due to the immense developments this company sells 56k6 connections and I see my 28k8 drop to 14k4. Yikes!
But... Hold on.... Didn't I sign a contract stating that this company promised me a clear 28k8 connection? Sure, contracts can limit people and companies but they can also insure your rights very clearly.
Besides; I think that Europeans (at least we in Holland) will (/ are) suffer(ing) more then the people in the US. I've noticed this from the very first moment when I read an American magazine; you guys have to re-new your subscriptions and such (every 1 - year) while we can sign up papers which state that the subscriptions will go on untill I tell them I don't want it anymore. And yes; this also exists in contract form.
May I have your attention please,
...........
may I have your attention please,
will the real bruce perens please stand up,
I repeat will the real bruce perens please stand up
.....we're gonna have a problem here.........
Ya'll act like you never seen a slash poster before
mouse all on the floor
like mom and daddy just burst in the door
and started whoopin yer ass worse than before
they first had endorsed
buyin' ya a crappy computer (aaaaaah)
It's the return of the...
"awww..wait, no wait, you're kidding,
he didn't just say what I think he did,
did he?"
and Mr. Cray said...
nothing you idiots, Mr Cray's dead
he's locked in my bassment
microsoft women love Sig '11
chicka chicka chicka bruce perens,
"I'm sick of him, lookit him
walkin around, grabbin his GNU know what
flippin' to GNU know who"
"yeah, but he's so smart though"
yeah, I probably got a couple of screws up in my head loose
but no worse than what's goin on in your sister's webcam (eheheheh)
sometimes, I wanna get on ZD and just let loose
but cant, but it's cool for RMS to hump a dead GNU
My mouse is on your link, My mouse is on your link
and if you're lucky, I might just give it a little click
and that's the message that we deliver to little kids
and expect them not to know what a free software is
of course they're gonna know what Microsoft is
by the time they hit 4th grade
they got MS-NBC, dont they?
we ain't nothing but omnivores
well, some of us carnivores
who read other people's mail like crackwhores
but if we can read your e-mail like it's available
then there's no reason that a man can't forge spam from your account
but if you feel like I feel, I got the antedote
trolls wave your penis birds, sing the chorus and it goes........
I'm Bruce Perens, yes, I'm the real Perens
all you other Bruce Perens' are just imitating
so won't the real Bruce Perens please stand up,
please stand up, please stand up
cause I'm Bruce Perens, yes, I'm the real Perens
all you other Bruce Perens' are just imitating
so wont the real Bruce Perens please stand up,
please stand up, please stand up
Sig 11 don't got to cuss in his posts to get Karma
well I do, so fuck him and fuck you too
you think I give a damn about my Karma
half of you trolls can't even stomach me, let alone stand me
"but bruce, what if you win, wouldn't it be weird"
why? so you guys can just lie to get me here
so you can sit me here next to Natalie here
shit,Enoch Root's momma better switch me chairs
so I can sit next to trollmastah and Post First
and hear em argue over who modded it down first
little troll, flamed me back on IRC
"yeah, he's fast, but I think he types one-handed, hee hee"
I should download some audio on MP3
and show the world how you released it BSD (aaaaaah)
I'm sick of you little troll and l33t groups
all you do is annoy me
so I have been sent here to destroy you
and there's a million of us just like me
who post like me, who just don't give a fuck like me
who code like me, walk, talk and act like me
and just might be the next best thing, but not quite me......
I'm Bruce Perens, yes, I'm the real Perens
all you other Bruce Perens' are just imitating
so won't the real Bruce Perens please stand up,
please stand up, please stand up
cause I'm Bruce Perens, yes, I'm the real Perens
all you other Bruce Perens' are just imitating
so wont the real Bruce Perens please stand up,
please stand up, please stand up
I'm like a head trip to listen to
cause I'm only givin you things
you troll about with your friends inside you rabbit hole
the only difference is I got the balls to say it
in front of ya'll and I aint gotta be false or sugar coated at all
I just get on the web and spit it
and whether you like to admit it (riiip)
I just shit it better than 90% you trollers out can
then you wonder how can
kids eat up these posts like gospel verse
it's funny,cause at the rate I'm going when I'm thirty
I'll be the only person in the chat rooms flirting
cyberin with nurses when I'm jackin off to porno's
and I'm jerkin' but this whole bag of viagra isn't working
in every single person there's a bruce perens lurkin
he could be workin at Micron Inc., spittin on your SDRAM
or in the printer queue, flooding, writin I dont give a fuck
with his windows down and his system up
so will the real perens please stand up
and click 1 of those fingers till you drag up
and be proud to be outta your mind and outta control
and 1 more time, loud as you can, how does it go?
I'm Bruce Perens, yes, I'm the real Perens
all you other Bruce Perens' are just imitating
so wont the real Bruce Perens please stand up,
please stand up, please stand up
cause I'm Bruce Perens, yes, I'm the real Perens
all you other Bruce Perens' are just imitating
so wont the real Bruce Perens please stand up,
please stand up, please stand up
I'm Bruce Perens, yes, I'm the real Perens
all you other Bruce Perens' are just imitating
so wont the real Bruce Perens please stand up,
please stand up, please stand up
cause I'm Bruce Perens, yes, I'm the real Perens
all you other Bruce Perens' are just imitating
so wont the real Bruce Perens please stand up,
please stand up, please stand up
haha guess it's a bruce perens in all of us........
fuck it let's all stand up
Will the real Bruce Perens Please Stand Up
A company wants to stick you with a POS machine for three years. In return, you get to pay them to use their ISP (at a perhaps slightly reduced rate), *and* you're a captive audience for their banner ads, spam, and physical junk mail. The only innovation here is that they've figured out how to snag more suckers.
Look at the music industry (god, how that phrase catches in my throat-- "idustrialized creativity" *brr*) for a short moment. Instead of jumping all over the 'net as a cost-reducing transport for their product, they're just jumping all over the 'net. They don't want to innovate, they want to keep things as they've been for the last several decades.
No-one is interested in innovation anymore. All they want is some asinine new angle (read: :cuecat) to sell to investors, and to patent to death (read: one-click). They come up with a minor idea, and hope to get a free ride on its coattails when its popularity "inevitably" takes off.
Of course, a lot of these organizations will be utterly screwed if the public ever smartens up. Selling expensive hardware as a loss leader is an extraordinarily risky move, and everyone should expect these organizations to either vanish or declare bankruptcy several months after they appear.
Five tons of flax.
One company is trying to change that, Virgin Mobile are selling phones at full price and offer relatively cheap calls for no line rental at all. (The other networks offer no-line-rental prepay options but the phones are subsidised a bit and the calls are hellishly expensive.
-- Soruk
The logic in this article would seem to apply to marriage contracts as well; for example:
Anytime someone wants your signature be aware of that fact. People may tell you "Oh this is just a formality" but don't be fooled. All you are doing by signing any document is giving someone legal ammunition to use against you. If you want someone to sign something, it is to bind them legally to do what you want isn't it?
This becomes very important as UCITA becomes the law of the land - as pushing a button on a computer screen - or even tearing open a shrink wrap becomes the legal equivalent of signing a document.
The libertarian myth is that contracts are freely arrived at deals between parties in equal bargaining positions. Anyone who thinks that they are in an equal bargaining position with Microsoft and their cadre of Wolfram and Hart style lawyers has got serious delusions of grandeur. If you were in an equal bargaining position with companies - you would write half of all contracts with the companies; you don't, and you aren't.
It may be argued that you don't have to sign anything, and that is true; of course you also don't have to eat, drink water, or continue breathing - you are also under no legal obligation to do those things either.
When the choice is "Sign the employment contract or don't work" most people choose to sign the employment contract - for all the same reasons that they would sign over their house if 'Big Tony' had a nine millimeter pointed at their head. When every company you try to work for has similar employment contracts - you have no choice; you either sign, or you die of starvation.
My basic conclusion, after all this, is that I have one answer to the one-year contract: "If I sign this, what incentive do you have to treat me right?". The best health club I ever belonged to had no contracts (it was a month-by-month deal) and had a level of service unmatched by anywhere I've been since, although, alas, it was also expensive.
-E
Send mail here if you want to reach me.
I think the key issue here is that these contracts are for "perishable" goods, but the contract's apparent cost is artifically deflated by having a term much longer than the duration of the perishable item being sold.
It's strange to think of computers (or computer services!) as "perishable," but think about new car leases. No car, even one sitting on the dealer's lot the entire time, is a "new" car a few years after its model year. So if you're looking for a "new" car (e.g., to project a successful image to clients) you'll want to replace your car every few years no matter how well it's running.
Computers, access technology, and ISP technology are obviously all perishable over a timeframe of 18-36 months. (The exact timeframe depends on your needs - a system used for the home office will probably need to be upgraded much more frequently than a general family system or kid's system.) We should see contracts that last 12-18 months, but that causes sticker shock so they artificially draw out the length of the contract.
Someone else mentioned health club contracts, and I suspect we'll see some of the same abuses that caused so many problems with health clubs. (E.g., some people bought contracts, the club closed within months, but they still had to pay to use a non-existent facility since the contract was with an independent financing agency.) How long until people buy systems where the ISP soon folds but the hapless user still has to pay $30/month to access a non-existent ISP?
For every complex problem there is an answer that is clear, simple, and wrong. -- H L Mencken
1st - please don't flame, the article is worth reading, but I disagree with it.
quote:
In the past, contracts and signed agreements have been used primarily to protect the individuals involved from legal action.
Maybe this is just a difference in terms, but most contracts protect corporations, not individuals / consumers.
quote:
They are now being used like a spider web. After they catch somebody, their purpose is to keep them subscribing/paying/buying their stuff, even if you don't want it anymore.
Yes, this is one way to look at it, but the purpose of these contracts is to ensure the revenue flow, and financial projections of a corporation. I think you'll agree that these companies are not trying to make you buy things you don't want (although that may be the case), however stock analysts require that a company can show recurring revenue.
Heck, even our security company (i.e. physical card-key/camera security) required a 5-year term as they were planning on going public! I do agree that there are many copycat companies to the "free computer with 5 years internet", however there are hundreds of other corporations that simply seek a viable business model in this economy.
The point in this response is that:
1. Lawyers write contracts
2. Lawyers work for corporations
3. Corporations want their stock to go up
4. Recurring revenue is one of the highest ranked factors of stock valuation.
5. New Economy service companies can't survive without recurring revenue.
Unfortunately, we'll see this more an more, for everything from long distance telephone service, to airlines (miles extended to complete loyalty etc...), to grocery stores...
Ahhhh .... the wonders of technology inflation ... it might not appear on the economic metrics but effectively with Moore's Law, you are obsoleting your existing IT infrastructure which forces you into endless cycles of upgrades.
... allowing you to sell their "contract" on the open market as you avoid being a captive audience (thus losing those lovely gatekeeper fees for directing you to their dotcon partners). Think about cars, how you could lease the latest and greatest, then trade in for the next model after a year and they flog it to the guy willing to accept a lower price. Unfortunately, they would get very pissed off if someone created a secondhand market for phone contracts (ie agree to take over repayment schedule) as then they can't sell you the next gee-whiz with additional bells and whistles (with price-tag to match).
Unfortunately manufacturers don't like the alternative
The alternative is the pay-as-you-go stored-value card which allows you the freedom to swap carriers if you dislike their level of service (which they of course discourage through additional connection fees). The problem is that someone has to pay for all that wireless infrastructure and that someone is the consumer (certainly the shareholder is not going to take the lumps if it can be avoided).
LL
Ring! Ring!
....Paul
JQP: Hello?!?
MS: Hello, this is Microsoft, is this John Q. Public?
JQP: Yes. But...
MS: Well, we have determined that you are in violation of your license agreement as we do not approve of the way you are currently using your Microsoft software.
JQP: But, I'm not using your software anymore. I've uninstalled it from my computer and disposed of the distribution media and materials.
MS: That is the problem. According to our latest license agreement, which was released 2 hours ago, you are no longer allowed to not use our software.
Well, a software license agreement isn't a contract per se, but that wouldn't stop most companies like MS from trying...
F U NE X N M? Son: "Dad... How do you spell 'hourly'?" Dad: "0 * * * *"
Please, half the world works like this. I was watching something a few months back where hairdressers were getting to the point where they wanted to force customers to sign something or hand over a credit card number in case they cancelled the appointment with no time for the slot to be filled. This sort of stuff is everywhere. Just read everything you sign! You're allowed to refuse to sign things.
Yawn.
But they miss the other major reason for contracts: getting you in the door with subsidised equipment and then trying to make sure that you eventually pay for it. This is of course a major reason for contracts in the cellphone business where you can often get the phone for free if you sign up for three years (that's the sort of deal common here in NZ anyway), but it's also a big factor in internet technology for things such as cable modems, ADSL, and satellite dishes, all of which have hardware that costs a major chunk of change. The early adopters (like me :-) will pay the full cost of hardware upfront, but the average Joe won't. Subsidies and contracts are about the only way to grow into the Joe Sixpack market.
... not the consumers. Anyone that thinks that a contract is in place to protect the consumer is living in some kind of socialist fairy-land, because the point of a contract in the modern world is to ensure that a corporation has a legal basis for getting payment from their customers.
Not that this is a bad thing - people love getting away without paying for things, and corporations have a right to receive proper payment for the services and products they provide to customers. In a capitalist economy contracts are always going to exist, because people are inherently selfish and you need to have a legally binding method of forcing them to pay.
New developments in contracts and licenses are merely making sure that this legal obligation to pay is still enforcable in the new digital domains that are becoming prevalent today. Like them or loathe them, they're an inevitable outgrowth of the rise of digital technology in a capitalist society, and they are necessary for the continued growth of our economy.
1) Constantly rushing round like a demented lackey, desperately trying to get business and undercutting each other all the time. and
2)Selling software, for money.
Since Slashdot has decided that the second is morally wrong, and the first seems to suck a bit, contracts are the obvious way forward.
-- the most controversial site on the Web
Admittedly I have always tried very hard (and reasonably sucessfully) to avoid getting to involved in this side of the business, so I may be way off base here, but it doesn't seem to me that this sort of use of contracts is at all new. In fact, this is the only use of contracts I've really been exposed to over the last five years.
From what I have seen the contracts have never really been about protection from legal action, but rather as a specific assingment of duties which enable legal (or other, prenegotiated) remedies when the customer stops buying the service/product/scam in question. I just assumed this was an old, standard way of doing things (dirty pool though it may be).
What other uses has anyone seen for contracts? I'm interested, as I've aparently completely missed them.
--
Behold the Power of Cheese!