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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.
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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
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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 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.
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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.
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.
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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).
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.