Closing spyware loopholes

Friday, 25 October 2002, 9:28 PM EST

I have this terrible recurring nightmare. One night, there is a knock on the door and Bill Gates and Steve Ballmer are there. When I ask why, they reply, "We are here for your kidney. Don't you remember the contract you clicked on when you downloaded the beta version of Internet Explorer? Don't you read those things?"

Fortunately, while "clickwrap" contracts are ubiquitous in the realm of e-commerce, a recent decision of a New York federal appeals court may limit how they are employed, even as it injects even more uncertainty into an already confused legal environment.

First, some contract law basics. A binding contract generally requires a bargain and a "meeting of the minds," which generally assumes some ability to know what you are agreeing to, and negotiate fairly. It does not require that the parties have equal bargaining power, and many (if not most) contracts that consumers end up entering into are of the "take it or leave it" variety -- buy the product and agree to the terms and conditions, or don't buy (and in some cases return) the product.

The problem for sellers of products online is, how do you get purchasers to agree to terms and conditions? The problem for purchasers of online products is, how do you negotiate? The answer to the first has traditionally been "clickwrap."

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