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Wednesday, August 6, 2014

What Are You Agreeing To In Online Contracts?

Do you read the fine print for all of those online apps and services you sign up for? Probably not. (Adam Fagen/Flickr)

Do you read the fine print for all of those online apps and services you sign up for? Probably not. (Adam Fagen/Flickr)

Many Facebook users were recently surprised to find that they had agreed essentially to be part of a social science experiment for the company without any notification. However, they agreed by accepting the site’s privacy agreement, known as a wrap contract.

Professor Nancy Kim, author of “Wrap Contracts: Foundations and Ramifications” (excerpt below) told Here & Now’s Jeremy Hobson that most people are happy to click “I Agree” — even though they have not read the contract.

“I have yet to find a major social network that would allow me to join without agreeing to their very lengthy and onerous terms of use,” Kim said. “It’s a decision that you have to make, but it’s not without consequences.”

Of the many contracts that allow users to access sites on the internet, Kim has found three main types of terms.

Codes of Conduct

Codes of conduct lay out the rights of the companies and what the user is expected to do or not to do.

“These companies are really dictating what we can do online, and even offline.”

“You know you’re not supposed to harass other users on a social networking sites, for example” Kim said. “Generally, even if we haven’t read the terms, we’re okay with those kinds of terms.”

Legal Gaps

Other terms try to make law where there is none.

“The technology is moving faster than the law, legislatures and courts are able to address issues,” Kim said. “Companies try to come up with terms that favor them where there is no law, where there are legal gaps.”

In these cases, if the company comes up with terms of use, they can set their own boundaries of acceptable conduct which users agree to, knowingly or not.

Non-Disparagement Fees

Some terms actually create rules that users may not expect.

“If you’re unhappy with the customer service, you would expect that you would be able to complain about it to your friends on social media,” Kim said. “Yet, some websites actually have a provision referred to as a non-disparagement clause that says, in fact, you’re not allowed to complain about your interactions with the website.”

When users do complain, they can be told they must pay a fine — one they unknowingly agreed to.

“The real danger with these types of terms of use is that most consumers will not want to go to court to fight it,” Kim continued.

It becomes a matter of convenience to simply pay the fine.

“These companies,” she said, “are really dictating what we can do online, and even offline.”

Book Excerpt: ‘Wrap Contracts’

By Nancy S. Kim


  • Nancy Kim, author and professor, California Western School of Law.

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Robin Young and Jeremy Hobson host Here & Now, a live two-hour production of NPR and WBUR Boston.

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