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I started law school almost exactly one year ago, and I still feel unsure of what I am agreeing to when I scroll through a terms and conditions (“T&C”) page before I just give up and click agree. One of the first classes I took in law school was the “Fundamentals of Contracts.” I learned that for a contract to be legally binding there must be mutual understanding and an agreement between both parties. I do not know about you but I never understand those tiny font, incredibly long digital contracts. Who actually reads those things?! How can they be legally binding if there is no mutual understanding?
A Business-Friendly System
Digital contracts have been held to a different standard than written contracts and are considered legally binding in most scenarios. If you have reasonably been informed that a contract exists and you have agreed to it either by clicking “I agree” or continuing onto the digital platform, courts normally find them enforceable. This frustrates me, the big businesses have all the power and consumers are not being protected. How much are we, as consumers, giving up by clicking “I agree”?
Contracts of Adhesion
Most digital contracts are contracts of adhesion. Contracts of adhesion are those that are fully formed before you read them; nothing is negotiable. It is either agree or do not use the service at all. This gives a lot of power to the business providing the service to create T&C that benefit them and not you, the consumer. This power imbalance is factored in the consumer’s favor during litigation; however, litigation rarely occurs for contracts of adhesion because you often give up your right to sue when you click agree to the contract. So, you have no power to negotiate the contract and no power sue if you have been wronged.
Arbitration/Mediation
If a contract takes away the power to sue, most of the time it will force arbitration or mediation to deal with conflict. Arbitration and mediation are alternatives to public lawsuits and often eliminate your ability to file a class action. Arbitration involves a neutral, third-party to make a decision instead of a judge. It is less formal and often quicker. Although possibly preferred by both parties, arbitration can be expensive and can often create a financial barrier to even starting the process of litigation.
Would Reading the Terms and Conditions Change Anything?
According to a 2017 study by Deloitte, over 90% of people do not read the T&C before clicking “I agree” (Cakebread, 2017). I am part of that 90% and my contracts professor also admitted he was part of that 90%. It seems like a broken system that will not be fixed.
Although reading the T&C feels like a daunting task, it may be worth it for you. A “well-drafted T&Cs can provide a whole host of benefits for both businesses and users; they set out expectations and rights, and protect other users from general misuse or abuse, but they can also determine liability limitations and stipulate which law applies in the event of a legal dispute” (Harrar, 2018). The T&C can give you a picture about the company you are about to start using and better prepare you for future conflict. My advice (not legal advice since I am just a law student), skim the document. If you were to read Instagrams T&C, front to back, it would take the average reader 86 minutes (Harrar, 2018). No one has the time or interest to do that. That is why skimming is a great plan B. A good T&C should make the important parts obvious to the reader. I am aware that most companies are selling my data and I have accepted that as a way of the world, but being an informed consumer is the best type of consumer.
- Cakebread, C. (2017, November 15). You’re not alone, no one reads terms of service agreements. Business Insider.
- Harrar, J. (2018, August 31). Do you accept the terms & conditions… or do they need to change?. Lawyer Monthly | Legal News Magazine.
Any requests for topic suggestions may be sent to rene@breenandperson.com. Although we cannot give you legal advice through the column, we can provide some general information that may be helpful for you to know. Our purpose is to educate and we hope that you can take something new away from this column each time you read it.