Zappos's crappy EULA found unenforceable, leaving Zappos without a legal leg to stand on

Of all the stupid clauses in the license "agreements" that the Internet crams down your throat, the cake-taker is "this agreement subject to change without notice." In other words, you're "agreeing" to anything and everything that the company dreams up, for the rest of time. This clause -- and its place in a "browsewrap agreement" that you supposedly agreed to just by visiting a website with "by visiting this website, you agree to our terms of service" on the bottom of it -- was found to be unenforceable by a federal judge in Nevada, who voided out the company's whole agreement on that basis, leaving the company vulnerable to lawsuits after a password leak affecting 24 million customers.

Eric Goldman's posted analysis:

Zappos can hardly be surprised by this adverse judicial ruling. We have known for years that browsewraps are unenforceable (see some of the cases discussed here) and judges clearly dislike unilateral amendment clauses (see, e.g., the uncited Ninth Circuit's Douglas ruling from 2007 and the cited 2009 ruling in the Blockbuster/Facebook Beacon case).

Still, the ruling leaves Zappos in a bad position. Its contract is legally irrelevant, meaning that all of the risk management provisions in its contract are ineffective--its disclaimer of warranties, its waiver of consequential damages, its reduced statute of limitations, its clause restricting class actions in arbitration...all of these are gone, leaving Zappos governed by the default legal rules, which aren't nearly as favorable to it. Losing its contract provisions meant Zappos is legally naked.

Avoiding this outcome is surprisingly easy. Use clickthrough agreements, not browsewraps, and remove any clauses that say you can unilaterally amend the contract.

That's pretty grim: you can load up nearly any BS you want in a EULA, and so long as you stick it in a clickthrough "agreement" and it's binding. Good time to remind you all of my own email sig, the original "Reasonable Agreement:

READ CAREFULLY. By reading this email, you agree, on behalf of your employer, to release me from all obligations and waivers arising from any and all NON-NEGOTIATED agreements, licenses, terms-of-service, shrinkwrap, clickwrap, browsewrap, confidentiality, non-disclosure, non-compete and acceptable use policies ("BOGUS AGREEMENTS") that I have entered into with your employer, its partners, licensors, agents and assigns, in perpetuity, without prejudice to my ongoing rights and privileges. You further represent that you have the authority to release me from any BOGUS AGREEMENTS on behalf of your employer.

Feel free to use this in your own contexts, of course!

How Zappos' User Agreement Failed In Court and Left Zappos Legally Naked (Forbes Cross-Post)

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