5 Strange and Misunderstood Legal Clauses Explained

Posted by Cian on Jan 12, 2016 11:06:27 AM

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 Refer to Beagle’s blog for a continuing series on contract support, as we discuss legal urban legends, simple language, and the odd variety of legal commitments that pass just under your nose.

 

‘Terms & conditions’ appear ubiquitously in our use of products and services online– and too often, we swallow legal agreements without fully understanding what they say.

 

The focus of legal terms and conditions is to limit the liability of the provider, and to specify the nature of what a user can and cannot do. Terms of Use;  Terms and Conditions; Acceptable Use Policy; and End User License Agreements are each ways to describe legal rights and limits. They are the most common (and most misunderstood,) of the contracts in our day-to-day life and they use a carefully selected language.

I’ve scanned several popular legal agreements for their readability scores and have cited five examples of strange, and potentially confusing clauses:

 

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iTunes

Readability Score: Grade 13 – Age 18 to 19

 

The iTunes ‘Terms and Conditions’ are a dense, 56-page saga– and I identified two (of many) confusing examples below:

 

1.) “Apple reserves the right to modify, suspend, or discontinue the iTunes Service (or any part or content thereof) at any time with or without notice to you, and Apple will not be liable to you or to any third party should it exercise such rights.”

 

In other words,  iTunes can shut down tomorrow, or drop all of their licensing deals for content, and everything you have used or ‘purchased’ promptly disappears… and you can’t do anything about it. The odds of this happening are low, but the language is clear: iTunes could shut down two minutes after you paid $199 for the complete Breaking Bad series, and you are out of luck.

 

Apple wants this to be explicitly clear to you– and your children. Let’s look at another part of the contract:

 

2.) “Children under the age of majority should review this Agreement with their parent or guardian to ensure that the child and the parent or legal guardian understand it.”   

 

This is an optional clause, because it includes the word ‘should’;  however, let’s think this through a little more deeply.

 

Apple’s expectation is that parents will explain 56 pages of legal terminology to their offspring– and in a way that their children can understand and abide by it.  Legally, this cram-session is to take place before anyone gets onto the iPad– and presumes that the parent or legal guardian is able to comprehend Apple’s language in the first place. Given the readability score for this document, it’s clear that the company hasn’t made much of an effort to translate for the layman (or lay-child.)

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Google 

Readability Score: Grade 10 – Age 15 to 16.

 

Google’s answer to iTunes’ 56-page contract is a relatively simple ‘Terms of Service’ document– and while it’s only five clearly-written pages, it doesn’t come without a catch:

 

3.) “Additional terms will be available with the relevant Services, and those additional terms become part of your agreement with us if you use those Services.”

 

Google is essentially saying, ‘Here’s a really simple agreement for you to sign– but if you choose to use any of our other, diverse services, you’ll be required to understand and sign another contract.’

 

This is the most fundamental contract that you’ll need to enjoy Google’s services… but each subsequent contract merits close examination, as well.

 

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PayPal 

Readbility Score: Grade 8 – Age 13 to 14.

 

PayPal gives you the option to send and receive money– and given that the company is managing your funds, it’s tempting to (incorrectly) assume that PayPal credit is liquefiable whenever the user chooses. In reality:

 

4.) “To secure your performance of this Agreement, you grant to PayPal a lien on and security interest in and to the funds held in your Account in the possession of PayPal.”

 

This language is not as teen-friendly as the readability score suggests. Through these terms, PayPal is suggesting that if you breach their agreement, they have legal precedent to collect on any debts they assign to you.

 

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Sony PlayStation Network

Readability Score: Grade 13 – Age 18 to 19.

 

Last year, Sony endured a huge security breach at the hands of hackers; in response, Playstation Network users came after the company with class action lawsuits.

 

Sony has subsequently added some clever terminology to their contracts– mostly as a provision to make it harder for you, the user, to go after them in court:  

 

5.) “...WILL BE CONDUCTED ONLY ON AN INDIVIDUAL BASIS AND NOT IN A CLASS OR REPRESENTATIVE ACTION OR AS A NAMED OR UNNAMED MEMBER IN A CLASS…

 

If there’s a major network outage or another security breach, this clause prevents users from joining a class action lawsuit to sue for a refund of their $89 network fee. This particular provision was challenged in court, and Sony was required to give people up to 30 days to opt out (which can be done in writing.) After this period, users are forced to individually contest Sony in court.

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No matter your reading level– or understanding of legalese– it’s crucial that you read and comprehend the terms and conditions contracts you agree to. And while the language is often frustrating, rest assured that any company issuing such an agreement knows exactly what is at stake.

 

 

 

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Topics: LegalX, Beagle, Legal Industry, Legaltech

Cian

Cian is a seasoned contract negotiator, Fellow of Stanford Law's CodeX, and the Top Dog and Founder of Beagle Inc. Beagle Inc. uses artificial intelligence to read contracts automatically, and provides a feature rich review tool set.