Archive for September, 2009

Are click licenses enforceable?

Tuesday, September 22nd, 2009

This post asserts that click licenses will become unenforceable, unless they are standardized.

In the past year, you have probably clicked through dozens of license agreements in various software programs and Web pages.   (That estimate may be low:  you probably clicked through more than a dozen agreements last year simply to run system software upgrades.)

These are binding contracts. But have you read all of them? Any of them?

Of course not. There isn’t time. It could take over 100 hours a year — weeks of work time — just to read your clickthrough agreements. So you don’t. No one does.

This leaves you with a somewhat opaque legal relationship with your software and Web service vendors.  You have made commitments, but don’t know what they are.  Yet there is no alternative, because the aggregate complexity of all such agreements exceeds your real-world capacity to absorb their meaning.

I’m no lawyer, but this dilemma seemingly creates two problems with contract enforceability.

  1. System software bug fixes with click licenses probably run contrary to the “implied warranty of fitness for use” in California and other states.  By selling you an operating system, Apple or Microsoft implicitly claim their product works.  When they send you a bug fix update, they are making good on that pre-existing warranty, and thus cannot require you to sign a new deal.
  2. More generally, sooner or later, some consumer may claim in court that a reasonable man cannot be expected to understand all his clickthrough licenses, because there are just too many of them out there.  Hence they are all unenforceable.

If tech companies were smart, they would create an industry association to standardize consumer software and consumer web service licenses.  This would hugely decrease cost, both to companies (legal costs of drafting) and to consumers (read and understand a single license for all similar products).  This would simultaneously increase enforceability, since no one could claim it exceeded the resources of a reasonable man.

This is a specific instance of the complexity-vs-transparency dilemma mentioned in a previous post.

You’re soaking in it

Monday, September 21st, 2009

I’m largely a free marketeer, but one must appreciate the irony of arguing this case on the internet, a medium developed largely by federally funded research.

Grasping for a silver lining

Sunday, September 20th, 2009

If America ends up in a sovereign debt default while trying to reflate, there are unexpected benefits.

While most empires collapse in war, America’s may collapse in peacetime. This would disappoint nationalists, and make us an even greater global laughingstock, but preserve lives and political stability.

There is almost no historical precedent for peaceful imperial decline. In “The Rise and Fall of the Great Powers,” Paul Kennedy can offer only the Hanseatic League, a Renaissance-era Scandinavian confederacy. Every other great power he covers was defeated or bankrupted by a major war.

Yes, I have heard we are in Iraq. At $80 billion a year, that strategic disaster seemed expensive, until the Fed starting throwing around thirteen-digit bailouts last year. If the country goes broke (or, by corollary, greatly erodes the purchasing power of the dollar), it seems Iraq won’t be the reason.

More immediately, we appear to be losing our position as the global reserve currency. This may also not be a bad outcome in the long run. Having the reserve currency creates moral hazard, as artificially low interest rates can be sustained for years without rational consequences (inflation and falling dollar). We may soon see better government by reestablishing (whether we want it or not) a more immediate, market-based connection between financial policy and currency value.