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EULA

October 24, 2005

Found an interesting comment on slashdot about how end user license agreements work under Australian law. If true it sounds like it means that many of the crazy clauses that vendors try and put in their licenses are unenforcable.

Under Australian Law at least, the contract formed by the sale goods has three phases:

1) Invitation to treat – ie – Our software costs this much if you want it.
2) An offer – Buyer offers vendor/retailer consideration (cash/credit card) for the product.
3) An acceptance – The vendor/retailer accepts the offer, and supplies the goods.

At this point, the contract has been executed.

The vendor cannot now impose restrictions on the use of the product unless they were made clear to the buyer as a condition of the contract. Naturally, this excludes their rights under the law (ignorance of the law is no defense, however failure to adequately disclose an express term of a contract is.)

So anything that is shrinkwrapped is not valid as it did not form part of the contract of sale.

EULAs that display on websites prior to hitting “buy” however (“Click Through” agreements) are a different story, and you’d have to turn to consumer legislation and equity provisions in contract law to see whether these are enforceable or not. In general, if it interferes with a buyers right to enjoy their property, it will be illegal. Thus we get into the whole “What is property?” debate. This is far from being settled.

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