Evan Schuman's StorefrontBacktalk

The use is kinda sorta authorized. But the parent had no idea that the authorization to buy the app extended for 15 minutes to enable in-app stuff to be purchased.

The parents in the lawsuit also argue that Apple and the app developers engaged in consumer and other fraud in the configuration of the iTunes service and by “marketing and promoting certain gaming apps as free or costing a nominal fee with the intent to induce minors to purchase in-app game currency.”

It’s important to note that the court didn’t decide this issue—it just decided that the issue needed to be decided and, therefore, that the case could go forward.

For retailers, the case presents a problem that is exacerbated by technology. In general, minors lack the capacity to enter into contracts (except for contracts for what the law calls “necessities”). Such contracts are voidable, meaning that the minor can walk away from his or her obligations. The doctrine, intended to protect “infants” (people under the age of majority—now assumed to be 18), arose in an age when contracts were few and far between. In those days, contracts were generally accompanied by a large and foreboding document, signed with a quill pen, sealed with wax and emblazoned with ribbons.

It was assumed that juveniles lacked the capacity to enter into such an auspicious agreement. Now, everything from consent to collect personal information to purchases of video games to streaming of movies is accomplished with just a click of a mouse or a tap of an icon. The average Internet user (and this is even more true with minors) may “agree” to as many as 20 to 30 “contracts” a day. Even if a minor affirmatively lies about his/her age, the contract remains voidable at the minor’s option.

This is even worse for things like videogames or online content directed at kids younger than 18. The retailer knows, or should know, that many of the people it “contracts” with for goods or services are younger than 18—that’s kind of the point.

With embedded credentials (e.g., stored credit-card numbers), retailers make it easier for minors not only to enter into contracts for the purchase of goods and services but also to pay for them. If they use Mom or Dad’s credit card, the merchant will likely assert that either Mom or Dad “authorized” the transaction (and is, therefore, liable for payment) or may allege that the minor’s use of the card is “unauthorized,” implying either that Mom or Dad are liable for the payment anyway or that the minor should go to jail for “stealing” the credit card.

Online contracts with minors are problematic. Merchants aren’t selling to “an account” or to a credit-card number but to a person—and there is a risk that the person lacks the capacity to contract. In theory, a minor could buy bubblegum at the counter, chew it, and then demand his/her money back. Online, the stakes may be much higher. The better approach for retailers—particularly for those targeting children—is to make it clear to parents that they are making the purchases and authorizing the use of the stored credentials to make those purchases. Even though it is not legally binding—and, therefore, not technically true—it is probably going to be enough to scare most parents into paying for their kids’ purchases.

If you disagree with me, I’ll see you in court, buddy. If you agree with me, however, I would love to hear from you.