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Retailers Can Put Anything In A User Agreement, But There’s A Huge Catch
There is a tendency among lawyers (and I am guilty as charged) to put all kinds of language in a Terms of Use or Terms of Service. And why not? Consumers rarely read them, and even if they do, they rarely choose to purchase products or services based upon these terms and conditions.
Courts have almost universally upheld these terms, and required consumers to give up substantial rights, including the right to sue for defective products or other disputes, the right to engage in or participate in class action litigation, the right to pursue legal or other remedies in the jurisdiction in which they live, and even the right to export the product or service or to even discuss or publicize complaints they may have about the product or service.
In a particularly egregious case, a software license agreement provided that the user could not “benchmark” or compare that product against competitors. Sure, why not? You can put pretty much anything into the contract, knowing full well that nobody is ever going to read it.
Unless the contract violates state or local law, or is what the law calls “unconscionable” (e.g., you have to give up a kidney), the courts will enforce them–even if the consumer never read it. The retailer can force consumers to give up a lot of rights in the fine print. This means that Green Dot can record my conversations, and there is nothing I can do about it.
Ultimately, there may be a consumer revolt, or one by the courts.
These “take it or leave it” contracts, while generally enforceable, are called “contracts of adhesion.” Courts don’t like them, and neither do consumers. As retailers get greedier–requiring, for example, consumers to provide a wealth of personal information as a condition of buying a T-shirt or a pack of gum—either the courts or legislatures may step in.
They have already done so in the areas of warranties, mandating certain warranties even though a consumer may waive that right by contract. Legislatures in the 1970s demanded consumer protections even if consumers couldn’t do so themselves.
There’s another problem for retailers. I don’t know why Green Dot needed (or thought they needed) my Social Security number for a $25 gift card. But they have bought themselves more than $25 of potential liability. Every time a retailer collects and retains personal information about a consumer, they have either an express or implied duty to protect the privacy of that data. This means encryption, access control, log monitoring, intrusion detection, intrusion prevention, data breach awareness and training, data monitoring, etc.
That’s an awful lot for just $25. And if there is a breach of the personal data, the costs can be much higher than $25. So, all this means that if you don’t need someone’s phone number to sell them batteries, don’t ask for it. CRM is a double-edged sword. So are Terms of Use and Terms of Service. Keep them simple, direct and necessary to accomplish your objectives. Don’t overreach.
And protect whatever data you get. Follow the Mom rule – if your mom can’t understand the agreement, it’s probably too complicated. And that’s a good rule of thumb.
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.
Cards issued by European banks when used online cross border don't usually support AVS checks. So, when a European card is used with a billing address that's in the US, an ecom merchant wouldn't necessarily know that the shipping zip code doesn't match the billing code.
-Marc
