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The Basics of EULAs
Garthilk writes "Blizzard recently made a bit of press when they announced that they would be actively enforcing their End User License agreement and prohibit the third party sale of game items and characters. Many people don't believe these clickthrough EULAs to be enforceable contracts. Thankfully Don Shelkey from the Corporate Finance and Technology section of the law firm Buchanan Ingersoll stops by to give us the low down. Mind you he is speaking on his own behalf and not on behalf any of his clients."
What I can't understand from this is WHY Blizzard would be opposed to this? If a mini-economy were to open up around your game, isn't that a good thing? They could get into the act themselves -- selling magic items and high level characters to the highest bidder? Hasn't anyone learned ANYTHING from the file swapping issues, Hacked satellite boxes or even drug interdiction? You can't stop people from doing what they want, and by picking battles of silly stuff like this weakens the arguments in legitimate cases where people actually are injured.
If there is a market for WoW stuff, then people will buy and sell it. p>Alot of times you'll here the legal phrase "Qui Bono" which literally means "Who benefits." It's used in the context of trying to establish who really ganis from certain actions. In litigation like this, I think the question that needs to be asked is "Qui Incolmunis" -- or, who is injured. In this case, where (as far as I can tell) no one is injured, there should be no litigation.
I have read the players complaining about the constant "buy now" things they see online. I don't think that legislation is the right way to solve a social problem. Why not make all artifacts have a permanent lifespan with the character who first posesses them, and only 24 hours after that? You could make items/characters untradable, but people don't want that. They just want them to be not tradable for money. Unfortunately, the way the world is, money is a universally accepted currency that can be used to acquire things of value. Driving the market underground is exactly the same as an ostrich sticking it's head undergound -- you can't see the problem anymore, but it will still be there.
Nothing great was ever achieved without enthusiasm
RTFA.
EULA's have been enforced.
The standard disclaimer applies that this is not legal advice and is only offered for your viewing pleasure.
The law of contracts is the law of promises. Long before computers were invented, people were making promises. At some point, the law had to designate which promises it would enforce and which promises it would let slide. The former are called "contracts." That is, a contract is simply a legally enforceable promise.
To have a contract, you have to meet certain elements. I refer to the terminology of my professor and renown expert, John E. Murray, Jr., author of Murray on Contracts, a first year law student's bible on the matter. To have a contract, you must have 1) an offer, 2) an acceptance and 3) a validation device, most often, consideration.
The offer and acceptance parts are quite simple the vast majority of the time. Usually one party says "I will provide you with X if you provide me with Y," which qualifies as an offer. The other party says "I agree" and the deal is done. Consideration is sometimes a little bit tricky, but in order for a contract to be valid, there must be a bargained for exchange. Lack of consideration is why gift promises, even in writing, are not enforced. I say "I agree to give you $100 because I love you." We put it in writing signed by 10 nuns, each of which testify that I fully intended to give you $100. That is not a contract because there was no bargained for exchange of value. Promises to make gifts are simply not a type of promise that the law chooses to enforce.
Ok, so lets look at the typical EULA to see if it's a contract. The gaming company makes you and offer to play the game. In exchange for playing the game, you must agree to pay a fee each month and follow the EULA. That is the offer. You accept the offer by clicking "I Agree" when you log in. You technically do not need to do it each time that you log in, but most companies do this simply to remind the consumer that it is bound by the agreement (and to provide notice of any modifications). The promise is supported by consideration, namely the company permits you access to the service, and you pay the fees.
Tada, contract! So, what is all the fuss about? Well, you see there is good reason for confusion.
When software companies first started, it was easy. They had a product that they made. They wanted to license it to someone else to use, so they drew up an agreement, and said "sign on the dotted line." Those were the early EULAs and they were no doubt enforceable. But then software companies wanted to make its product easy to buy, so they threw it in a shiny box and popped it on a shelf. They certainly couldn't ask the clerk behind the counter to execute contracts for them, so they simply tucked it inside the shrink wrap and included "acceptance language" stating "by opening this box, you agree to these terms."
Wow, now wait a minute here?!? There is something messed up with the timing of the whole thing. It doesn't jive with standard contract formation process. So, I pay the fee, get the thing that I paid for home, open the box, and accept the offer before I see it? Hmm. Well that didn't make much sense, and judges weren't really familiar with how this whole thing worked, so cases came down that said these types of agreements, shrink-wrap "EULAs," are not enforceable. They aren't enforceable because they do not meet the elements of a contract.
But wait again! Some smart guy decides "this is great" and he goes and buys a piece of software that contains something like a telephone directory of the entire United States. He rips the contents off the CD and makes his own CD that does the same thing, and competes with the original company. The original company says "we will see about that" and the ProCD case is born. In that case the court determined that EULAs are enforceable because everyone knows what's in them, and everyone reasonably should expect to be bound by certain terms and conditions. Later cases came out, however that said EULAs are a special kind of c
Ceci n'est pas une signature.
The problem with EULAs is once you have purchased the product, say a game and opened the box (unreturnable at this point) you are exposed and forced, lest you forego the purchase price of your game/app/whatever lest you click on the little "I agree" box. It's a sort of blackmail. The vendor does not make the EULA available prior to purchase and "read it on the web" is not practical. Too much effort on behalf of the consumer, and conveniently not enough on behalf of the manufacturer/vendor.
While this is not the case all of the time, it is most often the case.
I will believe that EULAs are enforcable as soon as the first EULA is enforced, but not sooner.
I think the real issue is whether shrinkwrapped EULAs are enforceable, not EULAs in general. If I can view the EULA online, for example, as with GPL'd software, then why shouldn't it be legal? But if I have to pay money, remove shrinkwrap, view license keys, insert CDs, then have the option of reading the EULA, but cannot return the opened software if I disagree, should that be legal?
I don't think it should be legal, but then again I am not a lawyer, judge, or Congressman.
24 beers in a case, 24 hours in a day. Coincidence? I think not!
Examples of typical EULA language (paraphrased):
"We can install anything we like on your computer"
"We don't guarantee the program will even run, much less do what we said it will do."
"We are not liable for anything, even if our software makes your company's profits implode"
"We can collect any data we want and sell it for a profit"
"We will charge you to fix any problem found in our software, assuming we choose to fix the problem."
Sound's reasonable to me...
The NSA: The only part of the US government that actually listens.
Many people don't believe these clickthrough EULAs to be enforceable contracts.
And in Germany they are 100 percent correct. After all, a contract requires a clear volition from all parties. And a click on a virtual button or opening the shrinkwrap is not sufficient for that, as you can't even tell who made the click (maybe my cat stepped over the keyboard while I was out of the room).
If you're an online game implementor, you know that people will want to trade items. You know it, because you're not the first game out there, you're the fifteenth. You're the fiftieth. You can see that people want to trade items.
Sure, the arguments run in two major veins: it's not fair to the game for people to shortcut their character development, and it's not fair to the users, because sales fraud is rampant.
If you gripe about players trading items, you're pissing into the hurricane. Even if it's against all the rules, people will be trading items. And what's worse, people will be offering sales and not following through, so other people will scream about fraud. You're in a no-win situation: people who follow the "rules" are unhappy and people who try to get better game goods are unhappy.
Unhappy customers are not a good thing for any subscriber-oriented product. Unhappy customers who are highly connected, organized, and communicative are a major threat to a subscriber-oriented product.
So why make them unhappy unnecessarily?
Implement an escrow mechanism into the game service.
If a player wants to sell a +20 Sword of Wounding to another player (even on another server/shard/instance/cluster/whatever), let them. Have them put the item into a secure locker-style location in the game world. This takes the item out of the control of the player, to completely remove the ability to defraud. The item is listed up for sale, either to a specific customer, to a guild or alliance, or to anyone. Real cash will buy that item.
Now, where does the cash go? Most of it goes to the selling party. That's why they wanted to sell it in the first place. Whether the cash is presented as future service credits, or a company check, it doesn't matter. Games may differ on the finer points, but one thing is clear.
A cut of the escrow money goes to the game producer.
That's right: if you own the escrow, YOU earn money when YOUR players trade goods. You're the marketplace. It pays for all the effort you made to implement the secure lockers. It pays for the customer service aspect of managing the transactions. More transactions will go through without complaint, and you are in a position to ensure that.
You can't control eBay. You can't control the gentleman's handshake at the pub. You can control the secure locker mechanism that's hosted on your own servers. So earn some money from it.
What about that other line of reasoning, the thing about being fair to the players? What's more fair than instantiating a single set of rules, by which everyone has access? Many people don't trade because of the fraud, but they'll complain about how it's unfair that other people do trade. Others complain that if they don't trade, they can't be the best in the game. Well, it's not about being the best in the game, it's about being the best you can be.
When I was a big game player, the game I played had one simple warning to those who complain about fairness and balance and competition. There will ALWAYS be someone who is stronger, faster, better-equipped, higher-leveled, and prettier than you are. Get over it. It's a game, and the best way to have fun is to skip the notion that you'll be the biggest and baddest in the game. Just be the biggest and baddest you can be. If you don't want to trade, then don't. But if you want to trade, do it securely.
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It really doesn't matter if click-through is binding or not. Most companies just play the "Right or wrong, we'll sue your ass into the ground and bankrupt you on court costs."
Depends on the state, but in some of them they can get hit with fines in addition to having to pay the defendants full legal costs for filing a SLAPP lawsuit. (Strategic Lawsuit Against Public Participation) Mattel found this out the hard way when they sued that artist using Barbie dolls in his art. Mattel didn't like the way he used them and sued. A judge threw it out, fined Mattel a large amount and made them pay the guy's full legal fees.Who does an 800 pound gorilla sue? Anyone he wants.
Sadly not all states have anti-SLAPP laws on the books, they all should.