It Pays To Read License Agreements (7 Years Later)

Back in 2005, one lucky PC Pitstop customer won $1,000 by simply reading our End-User License Agreement (EULA) We temporarily added a clause to our EULA offering money to anyone who contacted us, but it took five months and more than 3,000 sales before the first person – dropped us a line asking about the clause.

7 years later — our experiment continues to garner attention in articles detailing the dangers of unread EULAs.


EULAs. Who reads them? They are lengthy and boring to read especially when all you want to do is to continue and use the application or game that is supposed to be installed. However, believe it or not, there are a lot of ridiculous clauses that you have agreed upon when installing the application. Some of them are excusable while others can be a violation to some as well. Nevertheless, that is the fault from not reading the EULAs. We’re not saying that you should be reading it every time you want to install something but here are just some of the things that you shouldn’t be surprised that you have agreed to.
Ridiculous EULAs that You Agreed Upon– (May 2012)

Let’s be honest, no one reads EULA’s (End User Licensing Agreement) – we all just scroll down to the bottom and click “I Accept”. EULAs are full of confusing legalese to make them incomprehensible to the average person – no one actually wants us reading them (you could use EULAlyzer, which reads them for you). That explains how these ridiculous clauses can exist in EULAs without any outcry.

10 Ridiculous EULA Clauses That You May Have Already Agreed To– (April 2012)



Original PC Pitstop article published in Feb 2005

It Pays To Read License Agreements

by Larry Magid

I have a deal for you.
In exchange for a free piece of software that helps you keep
track of your passwords and other log on information,
I’m going to install other programs on your PC that will track your web
surfing and display advertising that pops-up on your screen.
There will also be other types of ads on your computer based on information we collect.

Does that sound like a good deal to you? Well, if you’re one of the many Windows
users who have installed eWallet software from Gain Publishing that’s exactly what you
agreed to do. But you already know that because you read the End User License Agreement
or “EULA” that was available prior to installing the program. You did read it right? Of
course you did; before you could install the software you had to check a box
certifying that you read the agreement.
Legally speaking, that’s the same thing as signing a contract with pen and ink.

OK, let’s be honest. You didn’t really read the EULA.
How do I know? Because hardly anyone does.
To prove that point, PC Pitstop included a clause in one of its own
EULAs that promised anyone who read it, a “consideration” including money
if they sent a note to an email address listed in the EULA.
After four months and more than 3,000 downloads, one person finally wrote in.
That person, by the way, got a check for $1,000 proving, at least for one person,
that it really does pay to read EULAs.

Is anyone reading this? PC Pitstop offered a financial incentive in its EULA,
and it took four months before anyone responded.

Although this is not a scientific sample, it does prove a point.
People don’t read EULAs.
When we download and install software, we’re usually in a hurry to take advantage
of whatever it offers.
That EULA is just one more thing to spend time on, and we’re
not just talking about a couple of minutes.
The December 2004 End User License agreement
that accompanies eWallet and other programs from the GAIN network
is 2,550 words long–that’s seven printed pages.

To its credit, not everything in Gain’s EULA is in legalese.
You don’t have to pay a Harvard law graduate $300 an hour to understand the first paragraph:

“GAIN Publishing offers some of the most popular software available
on the Internet free of charge (“GAIN-Supported Software”) in exchange for
your agreement to also install GAIN AdServer software (“GAIN”), which will
display Pop-Up, Pop-Under, and other types of ads on your computer based
on the information we collect as stated in this Privacy Statement.
We refer to consumers who have GAIN on their system as ‘Subscribers.’ “

The rest of GAIN’s EULA is also pretty clear. If you take the time to read it, you’ll realize that you’re giving the company permission to install software that “collects certain non-personally identifiable information about your Web surfing and computer usage.” This, according to the agreement, “includes the URL addresses of the Web pages you view and how long you view Web pages; non-personally identifiable information on Web pages and forms including the searches you conduct on the Internet; your response to online ads; Zip code/postal code; country and city; standard web log information and system settings; what software is on the computer.”

Gator’s eWallet EULA is contained in this small box but it is 7 printed pages long.

So what’s the harm in collecting “non-personally identifiable information?”
After all, isn’t that done all the time?
Well there are certainly examples of such collection.
Many legitimate web sites, for example, keep track of the number of
visitors and where they go the site.
This information is used to inform advertisers about a site’s popularity
and to give the site owners a better understanding of what parts of
the site are doing well and what sites are now.
Advertisers, of course, want to know how many people have viewed
their ad as well as “clickthrough” rates and other information.

But there is a big difference between collecting non-personal information
about what visitors are doing on your own site and tracking
“the URL addresses of the (other) Web pages you view and how long you view Web pages.”

Real live brick and mortar department stores, for example, do collect statistics
about what sections of the store people are visiting, how long they spend
there and what they buy. It’s basic research.
But imagine if you visited a store one day and they planted a bug on your
person that followed you around to all the other stores you visited?
While they were at it, they tracked your reading behavior,
what TV shows you watched and maybe even who you talked with.
They’re not writing down your name, but they are following you around.
Would this be legal? It might be, if they had you sign a contract specifically
allowing it before they let you in the store.

And by the way, they’re not just following you around.
They’re also getting in your way, making it harder for you to walk from place to place.
Making it harder to start your car and slowing it down once you start it.
They might even cause you to stumble now and then.
That’s a lot like spyware and adware; it takes up hard drive space, memory,
and other resources.
Also, it can significantly degrade your Internet connection because spyware is
going out over the Internet to get information to display and, in some cases,
sending out information from your PC.
In other words, it is using your resources–resources that you paid for.

GAIN is far from the only company that asks you to “sign” an agreement with
serious implications.
Marketscore, which bills itself as an Internet marketing research company,
offers a service which, it claims, can speed up your web surfing
and protect you from viruses.
Whether or not it actually speeds up your service is debatable, but one thing is for sure.
If you read Marketscore’s privacy policy you’ll learn that the company
“monitors all of your Internet behavior, including both the normal
web browsing you perform, and also the activity you may have through
secure sessions, such as when filling a shopping basket or filling out an
application form that may contain personal financial and health information.”

The company says that it has all sorts of procedures in place to
“restrict the third party’s use of the information we provide.”
That’s all well and good, but even if the company is as sincere and diligent
as it says it is, things can change.
And, if the company does decide to change its policy on how it handles
personally identifiable information, it “will notify you by posting proposed
changes to this Privacy Statement and on our web site.”
Those changes “will be effective immediately upon such posting.

And don’t think that can’t happen.
Even if the current owners are committed to keeping information private,
there is no guarantee that the company won’t be sold.
If it goes bankrupt, there is even the possibility of your information
being sold to pay off creditors.

You may wonder whether these licenses are legal. Most of them do
hold up in court as long as they are reasonably clear, according to Parry Aftab, an
attorney specializing in Internet privacy and security law
“The courts have said that if you click on something saying ‘I agree’ then it’s legal consent.”
There are exceptions however.
“If it’s not legally clear enough, you haven’t given consent to anything
because there is no meeting of the minds.
It goes back to basis of contract law from 500 years ago.
You have to both agree on what you are agreeing on.”
In other words, if the agreement is incomprehensible, it may be unenforceable,
according to Aftab.

Another exception has to do with minors.
“Kids,” according to Aftab, “are under state contractual age which is sometimes
16 and sometimes 18.
If the site requires the person to make an affirmative representation
that they are over the age of 18, it may keep the company out of trouble
but it’s still not enforceable.”

This is an important distinction because a lot of spyware and adware is
bundled with programs that are marketed to children and teenagers.

The fact that a EULA might not be legally enforceable is of little solace
because it is being enforced on you whether you like it or not.
Once the program is installed on your PC, the damage is being done and
it doesn’t even matter if the contract that you or your child agreed to may be invalid.
Simply by using your computer, you’re upholding your part of that contract
by giving up information.

Attorney Aftab says that even though the courts have ruled on the legality of EULAs,
there are still some grey areas that need to be ironed out.
And, of course, the courts are basing their rulings on current law.
There are some in Congress who alarmed at the growth of spyware and a
number of bills have been discussed that could impact the way these EULAs are written,
agreed to and enforced.

In the mean time, it’s “user beware.”
A click of the mouse, like a stroke of a pen, can get you into a heap of trouble.
Be careful, be aware and read those EULAs.

Larry Magid is a syndicated technology columnist and broadcaster for two decades,
and contributes to CBS News, the New York Times, U.S. News & World Report
and other publications.

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28 thoughts on “It Pays To Read License Agreements (7 Years Later)

  1. By the way. I have much to say on this topic in various increments.
    Another thing you might “want to be aware of”; if programs and features “do not” work or simply “cease to stop” working the way that it “should” or “it is suppose to work”. Then maybe you should head to the advice given and “NOT AGREE TO ANY TERMS OR CONDITIONS THAT MAY SEEM FAR FETCHED OR UNREASONABLE”. IFf you are unsure, then maybe it is time to invest in a lawyer to go over these “TERMS AND CONDITIONS” with you, “”””AS A PRECAUTION””””.
    The way some of these “EULA’S” have been written “”ARE LEGALLY BINDING””.
    I WOULD CALLS THESE REWRITTEN “EULA’S”. A DEVIL’s forgery, due to the simple fact of the nature that they are written in……

  2. I am writing an apology. In my earlier posts Cheetah was spelled Cheeyah. It is indeed WhiteCheetah. Thank You.

  3. “Most” times when a “site” or “program” has been “hacked”. The “EULA’s” are “typically” different from the “original”. Thus giving it a more than usual lengthy appeal so that the person (s) reading will “lose” interest and not “pay attention” to the “details”. That is why “hackers” use this “”form of hacking””. In most cases it is “overlooked” due to the length of the newly “rewritten” “EULA’s.
    “”This is hard to track this way””

    The EULA’s “seem” to appear “legitimate”, when in actuality “it is meant to” deceive the user into an agreeance with the “Author” of the “newly rewritten EULA” instead of the “”Original Author” of the “Original EULA”.

  4. The thing about EULA’s is the trick in finding one that is legitimate. “Most” sites and programs have been “hacked”, “written”, or “rewritten” with the use of “EULA’s.
    To spot one that has been “rewritten”, you need to “read” the “EULA” from the time that you open or “opt in” to a new site with “periodic checks” on the “EULA’s” of each site that you “opt into”. This may help and answer “most questions” about EULA’s.

  5. I'd read them if they actually worded it so that people can understand and they weren't 5 pages long. I don't have time to sit here for an hour just reading terms that I can't even understand properly since the majority of the text is a bunch of regulations and code numbers.

    Make them readable and I'll read them.

  6. A previous poster had it correct:

    If I don’t agree to the EULA, the software will not install. So what choice do I have?

  7. I try to read most of all agreements, but I must say, after while, I start to skip some because they're so darn long, and repeat the same thing in a slightly differant way.It start to get boaring.

  8. Does anyone remember the old Borland license? It boiled down to this:
    Treat this software like you would a book. Any number of people can read the book but only one person at a time can read it.
    Simple, eh?

  9. PS if they don't immediately enforce their rights then they give up their rights. Selective prosecution and enforcement are illegal.

  10. Frankly, I’m never going to waste any portion of my life reading an EULA. If there’s any legal implications, I’ll cross that bridge when I come to it. As Phillip said, they shouldn’t hold up in court and probably woudn’t if those terms were unreasonable.
    As for what info they collect and what they do with it, my days of worrying about that are long gone, life’s just too short.

  11. No agreement is enforceable if it is unconscionable, confusing, or too one sided. Since none of the agreements allow for adjustments in the clauses, I am forced to click on agree no matter what. I do not agree to much of the unethical and one sided clauses. I ignore all clauses anyway.

    I use common sense like not trying to peek at their code (as if I knew how to anyway), sharing the program or whatever (unless the copyright holder disappears from the internet or is too difficult to find to get permission), selling their item, etc. Ya know, things that would piss off your best friend if you did it to them.

    I have shared things that the copyright holder is long gone and I cannot find them even if my life depended on it.
    I figure that if they aren't going to be around to ask, then they voluntarily give up all rights to whatever it is.

    I call this abandonment of their copyright.

    Some companies place a$$inine restrictions in legalese form just to get you to click agree.
    Things like you give up the right to keep your personal information confidential, your email private, etc.

    All that is unconscionable. I am sure there are other examples.

    Another item is that if it shows on my monitor then it is free for me to do whatever I want with it. Otherwise, KEEP IT OFF MY MONITOR AND COMPUTER.

    Unless I click on 'I Agree' for each and every item, each and every time, then I do not agree. If they put it on my computer or monitor then they agree that I can do what I want with it.

    I didn't ask for some things to be put on my computer or monitor. If they put them on there without my express and informed consent then they gave up all rights to it.

    Did you know that malware writers can sue you for copyright infringement if you send their stuff to be analyzed? Or you delete their software without THEIR permission?

    Copyright and contract laws need to be made more sensible and consumer friendly.

    IMHO if you don't want to give up your copyright then KEEP IT OFF THE INTERNET PERIOD. Not force me to buy equipment that keeps it off my computer for you.

    I post on my desktop a README statement. It says that if any software, file, video, sound, picture, or other copyrighted material is put on my computer by any means then you waive all rights to your copyright and trademark.

    If they don't read it then it's like people not reading the EULA.

    You should be able to agree to parts of something and still use it.

    But forcing a one way agreement is unconscionable and in many cases illegal.

    An example – if you post a log file from windows that shows something bad about Microsoft on the internet they can sue you!

    I figure as long as you don't sell their material then you should be able to do what you want.

    50 years after the copyright holder' dies is far too long. Microsoft isn't a person. So 50 years after they go out of business then?

    All intangible material that is copyrighted or patented should have those rights expire 3 years after creation with a provision that any and all coding made available to the general public (no secret stuff).

    Since I am not a lawyer I do not understand most of the legalese stuff anyway.

    Perhaps a universal law should be made so you don't have to agree to anything.

    One that says you can't resell someone else's stuff if you got it for free.

    Something that does NOT screw the consumer.

    Suppose you took a picture of a new mural someone painted and emailed it to your family. Technically that is copyright infringement unless you have written permission.
    See how A$$inine the laws are?

    Ok, you take MY picture, even in public. Then share it with the world. That is my trademark, my copyright if you will. You shouldn't be allowed to do that either.

    Many things are abused, especially by the government.

    I could write for YEARS on how screwed up the laws are.

    Just remember, read my disclosure on my desktop and below before putting anything on my computer.

    "By putting or allowing to be put your trademarked, copyrighted material, or other material you have the rights to on this computer you waive ALL rights to said material and indemnify me and the computer owner from all liability. You agree to NOT block me or my access to said material or require my permission to put any material on this computer through hardware or software restriction measures.

    If you do not agree to this then do not put your material on this computer or the internet.

    If you don’t want me to freely have it then it is your responsibility to ensure that I don’t get it without tampering with my computer or connection in any way.

    You may email your 'I don't agree' and not place anything on this computer to (whatever email address you use)."

    Now, how do all the copyright owners like that statement?

    If I have to click I agree to anything then they should have to do the exact same thing.

    And if copyright owners can have their I Agree junk hold up in court then my disclosure does the same.

    About copyright – my disclosure statement in quotes above may be freely used, sold, or whatever you like. I don't care. Heck, I don't even want credit for making it. All I ask is that if you use it, it is on YOU, not me. I am not responsible for anything you do. By reading this post you agree to all I wrote.


  12. Hey,
    What’s the point?
    If you find something in the EUlA you dont like You can’t just scratch it out and click accept.

    If you want the product, you must accept everything written, or decline the purchase.

    Enlighten me.

  13. i have been so pleased with my product that i didn’t ever consider contacting you for refunds or compensation THANKS FOR YOUR FINE SERVICE!!! LARRY

  14. I use EULAlyser (free for personal use) to scan all EULAs before accepting them. I wouldn’t like to rate how good it is, but it does give me some peace of mind for minimal investment. Maybe you can try it on some of the ‘problem’ EULAs that you have come across, and report what you think?

  15. I often find the agreements are difficult to understand the way they are written. While I am far from stupid and have a pretty good grasp on the english language, I find them confusing. By the time I read half of it, I find myself just skimming through it.

  16. I try to read EULAs, but they usually launch into tiny boxes about three inches wide and two and a half inches tall. Typically, it’s not possible to expand the size of the box. It’s very difficult to read a 7 page document when you’re restricted to an area about the size of a mailing label.

    • @Phillip Mink: After having done logic then contract law at University, you would be surprised firstly what are in contracts, and secondly what are in EULA’s and License agreements. The exclusions are the more involved problems than the inclusions; as for unconscionable, we are talking about precedent law here, and not a morals and ethics class. As an example, some EULAs do wonderful copies of Health laws, and the exclusion clauses are masterful constructions of complex subjunctive clauses. Essentially, if you don’t read it, you get stuck with something like the ULTRAVIOLET agreements that are being pushed on DVDs and BLU-RAYS. If you cannot read the EULAS and LICENSE agreements, at the very least make a copy.
      The Difference between something that “Should not” hold up in court, and something that you agreed to because you read it ( supposedly), and therefore you got stuck is big.
      Showing reasonable cause or doubt that you got mislead is sometimes easy, but many times not as easy as it sounds. Basically, do not sign something you have not read. It stands good for real world advice, as well as e-contracts.

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