Business·Analysis

Can't understand clickable online contracts? It's time to legislate them away: Don Pittis

The Rogers contract reveals the absurd legal fiction that people actually read and understand lengthy online consent forms.

Obscure rules that no one reads must not be legally binding, says Canadian expert

Online agreements, which users must click on before accessing many websites, are long and complicated. 'These agreements are literally designed to discourage you from reading them. They're meant to alienate you,' says technology commentator Jesse Hirsh. (Iakov Filimonov/Shutterstock)

Have you ever, even once, carefully read and understood an online agreement before clicking the "I agree" button?

If so, you are in a tiny minority.

Even as we blithely click on the little green or blue rectangle that says something like "Accept Terms Of Use," at some point each of us must have had a niggling fear that hidden in paragraph 34 of the unread black type is a sentence committing us irrevocably to some devil's bargain. 

The revelation that with a click Rogers users had acceded to getting the agreement of all their friends and contacts so they could hand over those personal details to a U.S. company has only reinforced that fear.

So how can online companies from Rogers to Apple iTunes to Facebook bind you to an agreement of some hundred pages that you haven't read and may include virtually impossible requirements?

The short answer is, maybe they can't. But the law is not absolutely clear.

Contracts are read 'statistically never'

A related question is how often people actually read those supposedly binding online contracts.

"Statistically never, and that's how they're designed" said Canadian technology commentator Jesse Hirsh on CBC Radio last week.

"These agreements are literally designed to discourage you from reading them. They're meant to alienate you. They're meant to make you think 'I don't need to read this,'" he told Toronto CBC Metro Morning host Matt Galloway. Hear the full conversation.

A train from the 1800s when railways were the source of important consumer and contract laws, including one that affects clickable consent today. (Suzanne Plunkett/Reuters)

The legal basis for clickable contracts originates in an English railway in the 1800s. More on that in a moment.

But despite the history, their validity remains disputed, with the courts having ruled against such agreements.

But the courts may actually be the worst place to settle such issues that often go head to head with Canadian laws on privacy and consumer rights. Clearly, says Hirsh, a lengthy clickable agreement is often intended to commit consumers to things they would rather not commit to if they truly understood.

Protecting them, not you

"The fact that it's so incomprehensible, the fact that it's so long, should tell you that it's not about you, it's about them, and it's not about protecting your interests, it's about protecting their interests," he told Galloway.
Facebook CEO Mark Zuckerberg testifies on April 11 before a U.S. congressional committee about the company's use and protection of user data. Canada's Supreme Court has ruled that despite a Facebook user's ostensibly agreeing to a provision allowing the company to use her to promote a product, that provision conflicted with British Columbia's privacy laws. (Leah Millis/Reuters)

Instead of trying to fix the agreements, or worse, to use valuable court time to hammer out the legality of clickable contracts on the basis of common law precedents, one of Canada's foremost experts on contract law says it is time for legislators to step in and protect consumers.

Angela Swan, a lawyer with the Canadian firm Aird and Berlis who also teaches at York University's Osgoode Hall Law School, wrote the book on Canadian contract law. In fact, her fourth edition of the legal textbook Canadian Contract Law will be out in two months.

Swan says internet users annoyed by click agreements may want to focus their blame on an 1877 case where a railway cloakroom lost the bag of one Mr. Parker.

Some conditions may apply

"Mr. Parker sued South Eastern Railway and he was met with an argument that the ticket he had received as a receipt for a deposit of the bag said, 'For conditions see notices,' and the notices limited the railway's liability to much less than the value of the bag," explained Swan.

The railway won, setting the precedent that customers need not have read or even known about a rule for it to apply.

But a far more recent case from British Columbia, Douez vs. Facebook, flew in the face of the Parker ruling.
A small sample of the terms and conditions agreement for Apple Media Services where users agree to absolve the company of responsibility for warranty and liability. (Apple)

In that case, says Swan, the Supreme Court of Canada narrowly ruled that despite her ostensibly agreeing to a Facebook provision allowing the company to use Douez to promote a product, that provision conflicted with provincial privacy laws.

The court disallowed a provision of the implied contract that required her to go to court in California to challenge it.

In part, the ruling says Douez "is a private citizen who had no input into the terms of the contract and, in reality, no meaningful choice as to whether to accept them given Facebook's undisputed indispensability to online conversations."

Long, offensive and abusive

Swan believes that at the heart of any case on clickable consent is that portion of the Parker train ticket case that insists the terms of the cloakroom ticket would only be enforced "provided they are reasonable."

This is quite different from contracts that you sign. Courts have ruled that signing means you are committed to the terms of a legal contract, reasonable or not.

Of course the legal detail is more complex than a brief article like this can hope to explain. But essentially Swan says that because clickable consents are so new, the courts have yet to definitively determine whether they are more like cloakroom tickets or more like signed documents.

"I don't think the courts can do this," said Swan. She says online contracts are often unreasonable and have become offensive and abusive, disclaiming warranties and making difficult provisions about dispute settlement.

Using contract law, she said, no longer makes sense. "You're imposing terms on people who don't understand them," Swan said. Instead, governments must draft a set of standardized laws covering such areas as privacy, consumer rights and rules for settling claims.

"I think the only thing is to say we're going to have legislative arrangements which govern these things and when you click on something you're just saying, 'Both of us agree to comply with legislation.'" 

Follow Don on Twitter @don_pittis

About the Author

Don Pittis

Business columnist

Don Pittis was a forest firefighter, and a ranger in Canada's High Arctic islands. After moving into journalism, he was principal business reporter for Radio Television Hong Kong before the handover to China. He has produced and reported for the CBC in Saskatchewan and Toronto and the BBC in London. He is currently senior producer at CBC's business unit.

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