If a software company presents Terms of Service to an End User in a manner they expect users to neither read, nor understand - is it still legally binding?

A hypothetical

  1. Company A knows that their implementation does not conform to "Best Practices" - that their users dismiss pop-ups and walls-of-text as fast as they possibly can. Their users are typically not even aware that they are being presented Terms of Service and often can't recall any single term of that service.
  2. Company A knows of better Design Pattern Standards, to present these terms clearly and concisely, but decides not to present the Terms of Service that way.
  3. Subsequently, Company A relies on those Terms of Service (which they never expected the user to read, or understand) to dismiss a user's complaint or to take action against a user.

At least currently, the presumption is that terms of a contract are understood by both parties, and there is no limit on the length or complexity of a contract. There is a risk that the writer of the contract could express a term ambiguously, in which case the ambiguity would be construed against their interest. Assuming that is not the case, then the law holds that if you agree to something, you will be held to it. Your point 3 pretty much summarizes much of the workings of the law: you are held to obey the criminal codes of the US and your state, no matter how obscure the wording is. If one is not confident of their interpretation of contractual terms, one can hire an attorney to give legal advice.

Suppose, though, that there is solid documentary evidence that the company's contract is significantly less comprehensible that contracts tend to be, and furthermore that there was a deliberate effort to make the contract especially incomprehensible – and that this effort is documented (not just surmise from the fact that they wrote an obscure contract). Suppose furthermore that one of the terms is significantly against the interests of the customer, but a normal reading of the term (by a non-specialist) would make the term seem favorable. Then one might argue that the contract misrepresented the terms, which could be a grounds for invalidating the contract. Another possibility is that the contract could be held to be unconsionable, where he leading case is Williams vs. Walker-Thomas Furniture. As that ruling says, unconscionability involves "an absence of meaningful choice on the part of one of the parties together with contract terms which are unreasonably favorable to the other party". Moreover,

The manner in which the contract was entered is also relevant to this consideration. Did each party to the contract, considering his obvious education or lack of it, have a reasonable opportunity to understand the terms of the contract, or were the important terms hidden in a maze of fine print and minimized by deceptive sales practices? Ordinarily, one who signs an agreement without full knowledge of its terms might be held to assume the risk that he has entered a one-sided bargain. But when a party of little bargaining power, and hence little real choice, signs a commercially unreasonable contract with little or no knowledge of its terms, it is hardly likely that his consent, or even an objective manifestation of his consent, was ever given to all the terms. In such a case the usual rule that the terms of the agreement are not to be questioned should be abandoned and the court should consider whether the terms of the contract are so unfair that enforcement should be withheld.

However, rather than articulate a principle pertaining to contract comprehensibility, the court held

The terms are to be considered 'in the light of the general commercial background and the commercial needs of the particular trade or case.' Corbin suggests the test as being whether the terms are 'so extreme as to appear unconscionable according to the mores and business practices of the time and place.'

Which hardly defines how simple a contract must be.

It is, however, necessary that the customer actually be apprised that something is an "agree" button, and the terms that they are agreeing to do have to be visible to the customer. So for example white-on-white print saying "by mousing over this spot, you agree to these terms". The button has to say more that "click to continue" – it needs to say e.g. "agree to TOS" and has to present the TOS or a link to the TOS.

  • user6726 - Thanks! +1. A.) You said, considering his obvious education or lack of it; B.) I am not what counts as "education" : where end-users are conditioned over years, having been exposed to these patterns many, many times - conditioned to subconsciously navigate away from "distractions" not related to the software program's main function; C.) This subconscious behavior was significantly reinforced psychologically - due to the nature of "pop-ups", and other "distractions"; D.) Either way - perhaps this basis is enough to warrant a little re-consideration? Thanks again! – elika kohen Mar 24 '17 at 1:22

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