So currently on the League of Legends forum someone pointed out a clause in the LoL EULA that was one of those standard "cover our ass" clauses. The community ran with it (and with a semblence of intelligent debate) and the company lawyer joined the thread to educate a few people (and debate with some law professionals on the thread). I thought I'd transcribe those parts for you guys, since EULAs have come up a few times here. Lomar is the name of their legal counsel.
sharpenedstick wrote:I'd say a fairly strong case can be made against many provisions found in most EULA's, although I'd admit that in general the basic framework would remain as the starting point in any dispute.
Aside from the considerable adhesion question, many EULA's contain clauses known by the drafters to be unenforceable in many jurisdictions, such as forum selection. Additionally, the extensive and rather obscure language throws into question whether the parties ever establish the requisite understanding necessary, since most users do not bother reading (including the CJ of the SCOTUS), let alone understand the terms. To make matters worse, many software users are minors, foreign nationals, or others who have solid claims against contract formation.
To say that the EULA is binding in the nature of a traditional contract, say for the sale of lumber, is vastly oversimplifying. It's true power comes from the fact that (in games at least), most EULA's represent the interest of companies, whereas most users are simple individuals without the means or the inclination to fight it. At the same time, we can't just discount the EULA as worthless either. As always when the law is involved, the issue is never as simple as it seems at first glance. And if a party makes a claim, never take it at face value (hence discovery)!
Lomar wrote:You're not going to get much mileage out of adhesion. In EULA/TOS docs for online software products, anyway. That's because you're not going to find successful adhesion arguments for entertainment products. We're not selling diabetes medication or water to an arid area (the subjects of two famous cases on adhesion). Courts are generally hesitant to apply this concept beyond items of necessity.
I think you and the other poster who mentioned this are viewing it more as a synonym for "unfair", and less as a nuanced, and rarely used piece of legal doctrine. It's true that there are a couple cases pertaining to EULAs where adhesion has been successful: Vault v. Quaid Software and Step-Saver v. Wyse, off the top of my head. But these cases are easily distinguishable, both from this industry in general, and from the specific scenario re: Riot's EULA/TOS (which, let's face it, is the only one I really care about anyway!)
I'd also counter the claim that drafters also bog down EULA/TOS documents with a bunch of unenforceable provisions. Maybe that's what bad drafters do, but it compromises the overall integrity of your contract, even with a severability clause. It's true, there are some provisions that are trickier to enforce than others - such as forum clauses (though even these are widely enforced). But there's a large line of cases, and I'd argue a stronger line, that stand for the proposition of enforceability: Autodesk, Arizona Cartridge v. Lexmark, Microsoft v. Harmony Computers, etc. Good drafters have looked at what is enforceable when, and what is prohibitive or risky, and they adjust accordingly. It's not a "vomit all over the page" proposition so much as careful surgery.
Ultimately you do have a valid point. Courts interpret things differently. Why do you think so many cases, across all industries, settle pro veredictum? Court is hard to predict! Every judge and every jury will form different opinions. Sometimes a 100% outcome for a set price is more desirable, from a business standpoint, than a roll of the dice. But in drafting these documents, you look at trends, and you look at case law. Our documents are drafted in the way they are, precisely because we are cognizant of precedent. Companies make strategic decisions that are impacted by the belief of enforceability of EULA/TOS docs all the time. They would not do so if these documents did not have a track record of efficacy.
This is getting too long, but as a final rebuttal: a) While you're right about minor incompetency to some extent, there are some holes in this. No time to find the cites, but I can come back to it later; b) I think you're wholly over-representing non enforceability with regards to foreign nationals. What does that even mean, when many companies do business or have offices throughout the world? It's a jurisdictional question, and I believe you will find that many jurisdictions are predisposed to uphold these sorts of contracts. Not all, by any means, but at least among developed nations, a majority.
Whew... I feel like Will Ferrell in Old School. Time to go pound some graggy.
sharpenedstick wrote:Having not read the LoL EULA (not a good idea for a lawyer, but there you go!) I can't speak to the specific validity of any of its terms or the likelihood that it would resist an adhesion (or unfairness) claim. However, the fact is that EULA's as a whole, due to the inherent inbalance between bargaining positions, the nature of acceptance (as you identified, where an EULA states you are deemed to accept without knowing the terms is where you're most vulnerable), and the overwhelming amount of verbage are vulnerable to an extent that most companies (and their counsels) don't like to admit.
Though, as I said, I make no statement regarding LoL's EULA.
I'm not sure I'd really equate contract formation to surgery, unless it's the cosmetic kind. I don't deny there's an art to contract formation (one reason I stay on the litigation side, rather than the transactional), but it isn't so much that unenforceable provisions are included out of laziness. Rather, in many instances (especially, it seems, gaming EULAs), they take a scattershot attitude to enfroceability based on several factors: 1) The clauses in question will be enforceable in some, but not all jurisdictions, so use them anyway, 2) Their inclusion is often of little harm, given severability clauses, and 3) the clientle of many of these companies is not in a position to contest the clause. In fact, just taking forum selection clauses, I know of one in-house who's attitude was that in the rare instance of conflict, many parties inadvertantly submit to (or conduct their affairs in such a way as to have been deemed to waive) personal jurisdiction anyway.
By foreign nationals, I more meant people who are not conversant in the language in which the contract is written, but didn't want to just say people who "didn't speak English," for a variety of reasons, not the least of which is that the class is both bigger and smaller than that.
EULA's are not worthless, and that was never my position. Even if they were virtually unenforceable (which is certainly not true), they would have value in deterrence alone. I have no doubt that you and everyone else at Riot legal, being in this particular industry, are capable of, and have actually drafted, an EULA that is overwhelmingly likely to be found valid and enforceable in most and, in the centrally material terms, essentially all cases.
My point was that EULA's themselves are subject to a certain degree of uncertainty which, owing to their recent (in legal terms) creation, have yet to be fully sorted.
Lomar wrote:Totally had you pegged as a lit guy! I think that's part of it right there, on a macro level. My job is to say: "We have this ironclad document that protects us from all liabilities". And your job is to shred my work and get at mah moneyz.
And yeah, this wasn't exactly a fair fight, given we're referencing a document I co-drafted. I still want to contest you on the surgery point, though. You know better than I that there are intangibles in any case. If a judge sees a contract he views as adhesive, but is constrained from calling it that by precedent, he/she can find other ways to penalize that party. (Big believer in legal realism). That was what I was alluding to when I said severability only gets you so far.
I agree generally with putting something in that has a mixed record of enforceability. Yeah, sometimes you take your chances, or you rely on the other party not challenging. But I do draw the line on things that are generally negative on precedent. In some of the cases I cited on EULA adhesion, I think that's how you got a ruling in that direction in the first place. The drafter put some crazy **** in there that was just too much for the judge.
And it's also a moral thing. (Shocking, I know). I'm really not interested in tricking people. The body of case law on this is pretty favorable, in my opinion, to the business side. There is plenty of perfectly good (or mostly good) law that I can utilize to shield liability and accomplish the other goals of the document. I don't really need to employ smoke and mirrors.
But really, I think we are mostly in agreement. I fully concede that SCOTUS (well, maybe not this SCOTUS) could hand down a ruling that completely overrules current precedent on enforceability. You're right. It's a young issue, applied to an even younger industry. To perceive that any issue of law here is "final and settled" is to give yourself a pretty stupid sense of false security. The flipside to that, of course, is you also can't be paralyzed by the unknown. You need to make the best of precedent as you find it, try to predict how various issues are trending, and guide accordingly. It's never a perfect science, I still prefer to think of it more as that than an art, but in either event, there are definitely ways of approaching this that are more optimal than others.
Really fun conversation, by the way. Really flying my nerd flag here.
Blizzard Entertainment Software Developer - All comments and views are my own and not representative of the company.
