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Man Sues Gateway Because He Can't Read EULA
Scoopy writes "California resident Dennis Sheehan took Gateway to small claims court after he reportedly received a defective computer and little technical support from the PC manufacturer. Gateway responded with their own lawyer and a 2-inch thick stack of legal docs, and claimed that Sheehan violated the EULA, which requires that users give up their right to sue and settle these cases in private arbitration. Sheehan responded that he never read the EULA, which pops up when the user first starts the computer, because the graphics were scrambled — precisely the problem he had complained to tech support in the first place. A judge sided with Sheehan on May 24 and the case will proceed to small claims court. A lawyer is quoted as saying that Sheehan, a high school dropout who is arguing his own case, is in for a world of hurt: 'This poor guy now faces daunting reality of having to litigate this on appeal against Gateway...By winning, he's lost.'"
I'm sure someone will set me straight if I am wrong, but in small claims court, doesn't the complaintant always represent themselves? And that court is structured to deal with such?
"To those who are overly cautious, everything is impossible. "
This was actually a pretty big win for him, and it means that the case will not drag on for years as the article suggests.
In California Small Claims (which this case was just kicked down to), an employee or executive of the company must be present at the trial - not a lawyer, and not somebody hired specifically for the purpose of defending the small claims suit.
If the defendant loses, there is exactly one possible appeal. At the appeal (to superior court), lawyers can appear, but the case is still treated as a small claims case (i.e. you aren't going to get out of it based on a legal technicality if that technicality violates the basic fairness of the case).
If Gateway doesn't send an employee, the appeal is going to be much harder because they have some pretty serious explaining to do as far as why the appeal should be heard. If they do send an employee, it is still tough because no new evidence can be presented at appeal so they will basically have to say that the judge was wrong and why.
Either way, this guy will have resolution within 120 days at the far side - as the appealin California for small claims must be filed within 30 days of the case being heard and if the appeal is approved, they put it on the docket pretty quickly.
I am TheRaven on Soylent News
Generally, yes. Gateway has traditionally included its agreements in the box. Practically this exact same case has been tried before:
http://www.badsoftware.com/hill.htm
Javascript + Nintendo DSi = DSiCade
Actually I had the understanding that a lot of installer makers force you to have an EULA, so they just put the GPL in them trying to be cutesy. I have seen a few that just said "Click 'I agree' below". It's worth noting, here on Linux, the only EULA I ever seen was when I installed flash.
Great Intellect...
if you even read the summary, you'd see that he in fact, could not see an "I agree" button.
~/.sig: No such file or directory
From the article:
"On Monday, Attorney William Portello, a partner in a Concord law firm, and Sheehan, a high-school dropout who has argued his own case, faced off in a Cameron Park courtroom."
It saddens me that courts can be manipulated more by credibility rather than facts. I hope that the judge can look past the 'high-school dropout' and listen to the claims. I'm not sure why Hudson Sangree (Bee Staff Writer of this article) deemed necessary to introduce a David vs. Goliath scenario but I hope it won't influence the decision.
Also, why is there a quote from some unknown source given?
From the article:
"This poor guy now faces daunting reality of having to litigate this on appeal against Gateway," Palefsky said. "By winning, he's lost."
After reading the article, the writer shows many discrepancies. I've actually felt the need to dismiss the article and read up on this story from a different source.
Does anyone else get the impression that the way this article was written, the writer was laughing at Sheehan the whole time?
A black cat crossing your path signifies that the animal is going somewhere. -- Groucho Marx
i seriously doubt gateway will win this. you can't tell someone they have no right to legal recourse either, to allow that strips the courts of their power and doubt they will be happy about that attempt.
If you mod me down, I will become more powerful than you can imagine....
From the previous link (an appelate court decision):
A contract need not be read to be effective; people who accept take the risk that the unread terms may in retrospect prove unwelcome.
A vendor, as master of the offer, may invite acceptance by conduct, and may propose limitations on the kind of conduct that constitutes acceptance. A buyer may accept by performing the acts the vendor proposes to treat as acceptance." Id. at 1452. Gateway shipped computers with the same sort of accept-or-return offer ProCD made to users of its software.
Three words: Uniform Commercial Code
It's a modification to contract law that is intended to make in-box agreements legal. The point of the law is to speed up transactions in cases where the cost involved in drafting a proper contract would negate the value of the transaction. Therefore the law provides the consumer the opportunity to review the contractual information in the form of a pack-in contract, which the consumer is free to reject by returning the product. Using the product constitutes acceptance of the contract.
Given that courts have ruled this legal several times (see: ProCD, Inc. v. Zeidenberg, Carnival Cruise Lines, Inc. v. Shute, and - of course - Rich Hill and Enza Hill, v. Gateway 2000, Inc.), consumers should BE CAREFUL WHAT YOU AGREE TO. If the terms of the contract are considered reasonable, you may be held to them in a court of law.
Caveat Emptor.
Javascript + Nintendo DSi = DSiCade
Actually, Gateway won litigation over just that. They had a EULA on the box, the couple who purchased the computer ignored it, and a judge ruled if they didn't like the EULA, they could have shipped the computer back. If I had my casebook with me, I'd give you a cite. But EULA's printed on the outside of computer boxes are legal. For software, see the ProCD case, which held the same thing.
http://bgcommonsense.blogspot.com
In normal contract situations, the parties can agree that the contract must go to arbitration, not court, in cases of disputes. If you take it to court without going to arbitration, then you're in violation of the terms of the contract, and the court will usually (but not always) require that you take your dispute to the arbitrators specified in the contract. Now, if you're not satisfied with the outcome of the arbitration, you can still sue under the law. However, the courts will usually (but not always) demand that you show evidence the arbitration was flawed before they'll reverse the results of the arbitration, because accepting the arbitration results was implicitly part of the contract.
Here's an anecdote for you: my business partner (50/50) earns $USD 2,000.00 profit per day, every day, from our joint venture.
He's a high-school drop-out.
Nobody can "sign away" their statutory rights. You can't make a contract whereby you agree to be someones slave, because freedom is a statutory right - one granted by statute. Similarly, in a lot of places, consumer legislation gives you the right to sue any manufacturer for a defect - as a statutory right, you can't waive it, and any contract that includes such wording is void.
That's why you always see wording like "Any provision of this agreement that are contrary to local law are excised. You may have other rights depending on your state or province ...." You can't "waive" those rights with an EULA - even one you signed, never mind a post-purchase popup that you never saw and never agreed to.
Also, it'll be fun seeing Gateway try to appeal this one ... they're out of luck here. Asking people to waive their rights to redress just means you think your product is so crappy that there's a good chance that people will sue you out of business.
Stupid Gateway! Remember the old saying - a happy customer might tell 2 peope - a p*ssed-off customer will tell 100? Try a MILLION, because you can be sure that everyone's going to hear about this one - the competition will make sure of it, if nothing else.
Kevin Smith on Prince
I hate the parent's comment. It shows up in every slashdot thread whenever the story is about a contract question. The problem is that it's not legally, or even practically-speaking, accurate. Moreover, the fact that it gets modded up to +5 is really frustrating.
I have no idea why people think that one actually has to sign anything to form a contract. Most US states have no such requirement. The closest thing to any such requirement is in the statute of frauds, but the statute of frauds is applied very narrowly (the US doesn't typically like formalities).
Contracts are formed all the time without signing anything. More often than not, the only questions for a court in a contract between businesses and consumers are: 1) was there proper notice of the terms and 2) are the terms unconscionable?
In this case, there is a good argument there was not proper notice.
Nevertheless, I think anyone that posts "he didn't sign anything" should be modded like "first post"ers.
you'd see that he in fact, could not see an "I agree" button.
Even if he could have pressed that button, he'd still have a defective computer if that's all he could do with it. You can't sign a contract that violates the law any more than you can sell yourself into slavery.
Friends don't help friends install M$ junk.
No it isn't. You're thinking of UCITA, which only ever passed in Maryland and Virginia. The UCC itself long predates the sale of commercial software.
Ooh, a sarcasm detector. Oh, that's a real useful invention.
Unfortunately, the courts might tend to view a EULA as a Contract of Adhesion. In other words, it's "take it or leave it".
There's nothing that can be done about these types of contracts that force you into binding arbitration in the context of software other than what this man has argued and similar. In fact, your best realistic choice is to exercise your rights and use the option of not agreeing to the EULA, and shipping the machine back at their expense.
By doing this, the company incurs significant restocking and repackaging expenses and will eventually (hopefully) learn that such agreements are not worth the cost. This is especially true when you specifically tell them that binding arbitration terms are the primary reason you are returning the unit. Only in this way do we have any hope of stopping these kinds of unfortunately increasingly common practices (other than, of course, legislation).
If Ford SUVs started exploding due to a manufacturing defect, the public cannot be realistically be told they can't sue Ford because of a single line in a 200 page contract.
That is by far the funniest thing I have read all week. And I've been going through documents, so I see a lot of funny things (and a million boring things).
All the states have enacted the UCC, and they did so decades ago. It actually is pretty useful and does a lot of things. It's a good law on the whole, and the bad bits, like UCITA have been flops. Just fix this particular issue rather than throwing the baby out with the bathwater.
-- This and all my posts are in the public domain. I am a lawyer. I am not your lawyer, and this is not legal advice.
although it is true that small claims judges are much more fair to the average joe, once he wins this case, it will be appealed to a higher court. It is here where he will be "in a world of hurt". My sister sucessfully sued and won against GE in a case in small claims court with regards to a fire that started in her apartment. Although the small claims judge was convinced based on the evidence that the GE adapter started the fire, they just appealed it up to a higher court, requiring a lawyer. Corporate lawyers are already paid for, so this wont cost Gateway anything...
( http://www.courtinfo.ca.gov/selfhelp/smallclaims/
"If the business is a corporation, an employee, officer, or director must go to court. That person can't be hired just to represent the corporation."
I'm .... trying..... so..... hard... Must..... avoid..... Polish.... joke!
Sorry, had to go there. Seriously, though, you are 100% correct. Even now that we Americans have totally trashed our own rights, the right to sue cannot be given away or signed off.
HOWEVER
When you agree to something that states (quite illegitimately) that you are giving up your right to sue, you do actually make it more difficult. You must first make the attempts mandated by that contract you agreed to settle the matter. Then, if you followed those rules with good faith, and you failed to reach an agreement that a 'normal' person would find appeasing, you can sue and have a chance of winning. If you fail to negotiate in good faith or fail to take the deal that a 'normal' person would take, then you can sue, but don't hold your breath... you'll likely lose.
I don't know what's going on in the jurisdiction where he took the case to court, but in many jurisdictions, including my own, there's no reason you can't use lawyers in Small Claims Court. You might piss off the judge, but if you're a corporation, it's entirely expected.
"It is possible to commit no errors and still lose. That is not a weakness. That is life." -Peak Performance
If only there were some way to mod ehrichweiss' post as -1 incorrect. The UCC is not a federal law, it is state law. It is a uniform code enacted by the various states.
There is no such thing as a license which you "need" to agree to before using some software. There is no copyright on usage, only on duplication, distribution of modified forms, and possession or distribution of illegal integers. Anything that you are holding is perfectly legal to use in any way you see fit, unless you've explicitly agreed not to or would be violating some other law in the process.
The "I agree" EULA game is an attempt to con you into accepting a license which you don't need. Nothing more.
Consider: when was the last time you agreed to a license before playing a CD that you bought? Never? That's because you don't need one to use something you own, and only the software companies bother to pretend that you do, in the hope that nobody will call them out on it.
If he didn't pay with a credit card, he's an idiot for that.
There are people who buy things that don't have a credit card. I know a few who aren't idiots; in fact, some of them are clearly smarter than you, because they'd never make a ridiculous statement like this.
I've even purchased a computer in cash myself, because there was a 2% discount for doing so--credit cards aren't free for the vendor. On a $3K sale, I saved $60.
In the UK we have the unfair contracts act also, to protect us from pseudo contracts like this that try to stick it to us. So even if they managed to argue that not returning the product constitutes acceptance of the terms, you can point to the unfair contract act, which entitled you to ignore the lousy terms and keep the product anyway.
l e-supply/unfair-contracts/index.html
http://www.dti.gov.uk/consumers/buying-selling/sa
"The Unfair Contract Terms Act 1977 limits the use of exclusion clauses in contracts.
"The Unfair Terms in Consumer Contracts Regulations 1999 (SI 1999 No 2083) provide that a term which has not been individually negotiated in a consumer contract is unfair (and hence non-binding on the consumer) if, contrary to the requirement of good faith, it causes a significant imbalance in the rights and obligations of the parties to the detriment of the consumer."
Interesting article but I would have to say that it hardly has any substance to back up the fact that some high school drop outs are successful. First of all, most of those dropouts in the article are people who dropped out at a college/university level. Secondly, could they only find 6 successfully dropouts? On top of that one of them dropped out of college in the 50s! Many people didn't even attend college in the 50s. I don't think that article could argue that dropping out of high school leaves plenty of opportunities in current times because in all reality, it doesn't.
Try getting a job without a high school diploma... I'll be seeing you at McDonald's.
You are a fucking LIAR. From the GPL:
The concept of "proper notice" is a matter of state code and prior court rulings. It is not what you as an individual think proper notice should be based on a logic or critical thinking. Logic is not used in the court systems and it gets arm chair lawyers in trouble all the time. For example, in my state if I hand my car over to a valet I get a ticket that says if they damage my car or if my items are stolen out of my car then it is not their fault and I can't sue. Well, if I never bother to read the notice or if someone doesn't show me a large sign that has the notice on it and tell me to read it before I hand my keys over, the notice is not enforceable. Just including a notice with a product or service doesn't suffice in most states. The law is not logical, it is written in code and enforced in the most illogical ways though past court rulings. The court will ask you if the notice was properly displayed and if you read it. If I never flip that valet ticket over and read the notice guess what, it isn't enforceable - in my state. Other states have different laws concerning notices.
A further provision of this would be where any conditions which would have a significant impact upon the sale would have to be specifically accepted by the customer prior to the completion of the sale, for example M$ non-warranty warranty. As the sale had already been completed the initial contract was in force, the supplier has to now attempt to prove that the customer entered into a second contract that extended the first contract (with out any benefit to the customer). All the customer has to argue,is that he did not, the supplier is forced to prove that he did, and based upon M$ software warranty, it is impossible to prove that anything happened upon that computer at all.
Chaos - everything, everywhere, everywhen
In Illinois, a corporation of any size MUST be represented by a lawyer in small claims. You can not represent "yourself", because even with a small S-corp, YOU are a different legal entity than the company.
I don't understand why people believe that an EULA is only valid if read before purchase. The dividing line is not having seen the EULA, but rather having the opportunity to see the EULA. It doesn't matter whether you actually did it; only if you had the ability. That EULA was easy as pie to get. It stands.
Sloth almost never a defense under American law; similarly, ignorance only applies when it's not preventable.
StoneCypher is Full of BS