Monthly Archives: August 2008

Two Dilberts on Contracts

I love Scott Adams – he has an unnatural ability to truly capture the essence of whatever he points his pen towards. The last two days have been contracts:

(Click on each to see it full-sized.)


Lost in Translation

I downloaded an application this morning. All seemed well at first. The download was simple, installation was as easy as dragging the application to my Applications folder.

I fully expected some sort of click-through agreement. What I didn’t expect was that an application that was completely (up to this point) obviously written by a fluent English speaker would have a click-through license agreement in German. Heck, even the “I accept” button language was English.

Being the contracts geek that I am, I highlighted the license, went to Google Translation, and pasted it in (BabelFish, which used to be my preferred translator, has a 150 word limit). The translation took a few seconds. Here are a few of the resulting sections before and after:

3.2. Eine Trial-Version berechtigt allein zur Benutzung der Software zu Testzwecken. Ein Produktiveinsatz ist nicht gestattet.
3.2. A trial version only entitled to use the software for testing purposes. A productive use is not permitted.

5.2. Der Hersteller steht nicht dafür ein, dass die Software vollständig fehlerfrei ist. Sollte sich ein Fehler zeigen, der die Software für den üblichen Gebrauch untauglich macht, so liegt ein Mangel vor. Bei einem Mangel hat der Hersteller das Recht nach seiner Wahl den Mangel zu beseitigen oder eine Ersatzversion zu liefern (Nacherfüllung). Scheitert die Nacherfüllung zweimal, kann der Kunde nach seiner Wahl vom Vertrag zurücktreten oder die Herabsetzung des Preises verlangen.
5.2. The manufacturer does not ensure that the software completely error-free. If a mistake to show the software for the usual unfit makes, there is a shortage. With a shortage, the manufacturer the right after his election to eliminate the deficiency or a replacement version to be delivered (performance). The failure of the subsequent performance twice, the customer has his choice of the contract or the reduction in the price.

6.1. Der Hersteller übernimmt keine Haftung für Schäden, die auf einfacher Fahrlässigkeit beruhen, soweit sie sich nicht auf die Hauptleistungspflicht beziehen oder Verletzungen von Leben, Gesundheit oder Körper darstellen.
6.1. The manufacturer assumes no liability for damage resulting from simple negligence, to the extent it does not affect the main service obligation, or injury to life, health or body.

7.1. Es wird die Anwendung deutschen Rechtes vereinbart. Erfüllungsort ist die Schweiz und Trogen, AR.
7.2. Gegenüber Kaufleuten, juristischen Personen oder öffentlich-rechtlichen Sondervermögen wird die Schweiz und Trogen, AR als Gerichtsstand vereinbart.
7.3. Gegenüber Personen, die in der Schweiz keinen allgemeinen Gerichtsstand haben, wird die Schweiz und Trogen, AR als Gerichtsstand vereinbart.

7.1. It is the application of German law, agreed. The place is Switzerland and Trogen, AR.
7.2. Compared with merchants, legal persons or public service special asset, Switzerland and Trogen, AR as a jurisdiction.
7.3. Compared with those in Switzerland does not have a general jurisdiction, and Switzerland will Trogen, AR as a jurisdiction.

Now, except for jurisdiction and governing law, I’m not very displeased with the license.  In fact, it’s better for me than many English-language click-throughs that I’ve read.  And I like the way that some of the translations read. Overall, the Google Translation service was pretty darn good, even for something as twisty and potentially complex as a license agreement.

I’m really interested in anyone’s thoughts about the enforceability of such a document without a language clause stating that German would be the language used to interpret the document.  In other words, for a non-German speaker, do I have the defense (even if I click the “I accept” button) to say that I didn’t understand what I was agreeing to because I wasn’t presented a version in my tongue (as the rest of the application was)? Am I obligated to translate the document before clicking “I accept”?

Your comments would be appreciated.

Open Source Software Conditions versus Covenants

Meredith Miller, over on ContractsProf Blog, posted part of a review of an extremely interesting case the other day from the EFF‘s Michael Kwun.

I won’t attempt a rehashing of the analysis – the original is good enough.  But I will summarize.  In the case, the Federal Circuit Court drew a distinction between conditions (those things you must to do HAVE whatever the license is for) and covenants (those things your promise to do WITH whatever the license is for).  The result was a tick in the positive column for open source licensing proponents.

But the underlying argument may have some unforeseen aftereffects in the EULA realm.  Really interesting… and another issue to pay attention to in the future.

Why Priceline Commercials Piss Me Off

As much as I love Shatner, the Priceline commercials really piss me off.  Why, you ask?  Well, it’s because he plays the Priceline Negotiator – a person with a blue hotline phone who gets calls to go help someone “negotiate” a better price on their travel-related purchases.  He’s now even got a sidekick, Nofee, who doesn’t like airline fees.

This latest commercial exemplifies the problem:

Shatner gets a call while riding his motorcycle with Nofee in the sidecar.  He’s been alerted that someone’s buying an airline ticket and is paying fees.  He arrives just in time to prevent the person from completing the transaction, convincing them to use Priceline.  He closes out the commercial with the statement “Don’t you love to negotiate?”

Alright, so first, what part of using Priceline is negotiating?  Right… none of it.  The simple act of using Priceline might be a negotiation tool, but it is not negotiating.  Negotiating requires an element of effort, skill and practice.  Using one tool isn’t negotiation.

But more importantly, negotiation isn’t always about price.  Saving on fees is great, but if you have to travel when you don’t want to travel… or fly on an airline that you don’t like/want/prefer, the $15 in airline fees doesn’t seem like that big of a tradeoff, does it?

In fact, negotiation is almost NEVER about price.  Sure, we’ll talk about money… and we’ll look for an appropriate price for a particular good or service.  But usually, negotiation is about what I’m going to GET for a particular price.

At the end of the day, however, I just don’t like being compared to Shatner on a motorcycle.

But I love the hotline phone.  And you can reach me on mine through the contact page if you need help with your next negotiation.

License Grant Discussion at AdamsDrafting

Ken Adams has a great discussion going on over at his blog, AdamsDrafting on license grant language.  Ken’s general concern is that a license grant is overly complex language, redudant at best and confusing at worst.  This follows his general feelings regarding contract language (that we need to simplify and get rid of anachronisms).  And, generally speaking, I support his work to make this happen.

In this case, and as supported by most of the commenters, I think Ken’s admitted lack of knowledge in the subject matter of licensing is hurting his assessment.  Software licensing folks don’t like wordy contracts any more than anyone else.  We’d love to get rid of unnecessary phrases or redundancies.

But I’ve actually seen a license terminated at the will of the vendor as a result of a lack of the word “irrevocable”.  And I’ve seen one restricted because of the lack of the word “world-wide”.  So for me, simple language gives way to extra descriptiveness in the license grant just from a risk management perspective.

Five Productivity Boosters

A recent advertisement pointed out the simple truth that people are consistently wanting Nordstrom service at JC Penny prices. They note that lowering your rate to perform your services is not a good idea. Rather, you need to find ways to increase your speed and thus your productivity. This has the effect of lowering your cost to performing the service.

The same issue applies to contracts professionals. Even in a down economy, we’re still seeing a steady stream of contracts to review – a result of discounts and other incentives to complete acquisition projects. But we’re an overhead expense, so we’re not getting added help to get the deals done.

Here are a few suggestions on how to increase your productivity:

1. Templates, templates, templates. I obviously can’t say this enough. Draft templates for any document you’re going to use more than 3x/year. Software Licenses, Services Agreements, NDAs, and Statements of Work are all ripe for template creation. Don’t have a template or don’t feel you have the time to write one from scratch? No worries, visit the forum to get templates from Stephen Guth. He’s giving away some of his best work, so I would take advantage of it if I were you. Oh, and if you have a template you’re willing to share, create a post for it, send the template to me and I’ll make it available to everyone.

2. Convince the other side to use your templates. Yeah, so this is a corollary to #1, but having the template isn’t enough. You need to actually get the other side to review it to make it worth while. As a procurement person, my goal was to have 80% of all deals start with my paper. I would say almost anything to get the other side to use my template (but it was all true stuff): I would review their review of my template faster than I would review their templates; I couldn’t get to their templates for several weeks (and deals wouldn’t get done on their deadlines as a result); I could be much more flexible if they started from my templates (which is very true, since my templates are my absolute BEST case scenario); and in some cases, like for NDA’s, I wasn’t allowed to use anything BUT our templates (I actually have had policies changed to make sure I’m not stretching the truth when I say this). Do NOT lie… but don’t cave easily. If you have to use their template, treat it as a negotiation point in and of itself and get something in return for it.

3. Get your business folks to include you in the process MUCH earlier than we normally are (which is somehow always just 2 days from the end-of-the-quarter deal that HAS to be done). Just knowing what is coming down the pipeline can allow you to plan with much greater accuracy and efficiency. Convince the business person of the benefits to including you earlier and they’ll do it out of self-preservation needs alone. In other words, make it all about them and you’ll have no resistance to your request.

4. Contracts drafted by lawyers tend to be in two columns and incredibly small fonts (I dunno’ why that is… we didn’t learn it in law school). But make the darn thing readable to help your eyes and actual review process. Either use MS-Word’s View option to increase the percentage (125-150% is usually pretty good); or increase the entire font of the document to something 12pt or higher during the review and reduce it back when you’re done. Learn how to use Track Changes, and if your organization uses forms plus amendments rather than changing documents inline, get them to change their procedure to allow inline changes.

5. If you have a little bit of budget, there are a few tools that will also help you work more efficiently. I’ve listed some of my personal favorites in the Products/Other Recommended Purchases area. But there are two things I didn’t list. First, you need a large monitor (again, see #4 about size). Twenty-four inch or more are fairly cheap these days. And at that size, you can have 2 pages on screen side-by-side at 100%, perfect for document comparisons or large copy/paste jobs. Second, you need a software product called DeltaView (it’s now called WorkShare Professional). MS-Word has a “document compare” feature, but WorkShare is better for larger documents with more random changes (where there are large quantities of text that have been moved around). However, make sure you learn how to use document compare, as it can insert changes with Track Changes, which really helps.

Cracking the EULA’s Shell

Wired Magazine has posted an article by Jennifer Granick regarding a few California cases (state and federal) where the judge has decided that the terms of the EULA aren’t as ironclad as they have been for the last 12 years.  Generally speaking, the state court ruled that the terms of an EULA are generally procedurally unconscionable, meaning that they’re going to be seen as contracts of adhesion… and the federal court ruled that vendor’s can’t change the terms of an agreement without providing the customer with notice of the change (ie: simple continued use of a service doesn’t automatically mean you’re bound to the change).  Jennifer does a great job of explaining the logic.

Given the title of the article, Courts Turn Against Abusive Clickwrap Contracts, it would appear that Wired is attempting to sensationalize just a little.  The truth is that the courts’ rulings aren’t that surprising (even if they came from California, a state known to be a little “fringe” about their opinions).  The courts are applying some general contract priciples to EULA’s… which vendors have been lucky enough to avoid for the last decade.  It’s about time.