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Prof. Nancy Kim, California Western School of Law – Internet Contracts

In today’s Academic Minute, Professor Nancy Kim of California Western School of Law explores the nature of Internet-based contracts we often agree to without careful consideration. 

Nancy Kim is a professor of law at California Western School of Law and a visiting professor in the Rady School of Management at the University of California, San Diego. She teaches courses on contracts, licensing, and corporate governance, and is also a contributing editor to the Contracts Prof Blog. She earned her J.D. at the University of California, Berkeley and will publish a book on the ramifications of wrap contracts later in 2013. 

About Professor Kim

Prof. Nancy Kim – Internet Contracts

When a Web site asks if you have “read and understand the terms and conditions," most of us probably neither read nor understand them--but click "agree" anyway. The new documentary film “Terms and Conditions May Apply” argues that we may not realize how ignoring the legalese and clicking through "Wrap contracts"—shrinkwrap or clickwrap agreements—impacts our privacy and provides the government and corporation with access to our lives in ways few of us could ever imagine.

The big problem is the fact that wrap contract terms are more aggressive than standard contracts, and permit dubious business practices, such as the collection of personal information and the appropriation of user-created content. Unfortunately, all of us—every single person who has ever been online—has agreed to a wrap agreement and clicked ‘I agree’, thereby giving companies the right to collect and sell our personal information.

In digital form, wrap contracts are weightless and cheap to reproduce. Given their low cost and flexible form, businesses engage in "contracting mania" where they use wrap contracts excessively and in a wide variety of contexts. Courts impose a duty to read upon consumers but don't impose a duty upon businesses to make contracts easy to read. The result is that consumers are subjected to onerous legalese for nearly every online interaction.  

The recent revelation that the government has been monitoring our online activity has been big news over the past few months, but what is even more disturbing is that private sector monitoring hasn't really been as big of an issue.  We forget that the government wouldn't have had this information if these private companies hadn't been collecting it.

Consumers have largely been oblivious. We've been playing ostrich, burying our heads in the sand while Facebook and Google have been collecting all kinds of information about us…what's worse, we've agreed to it contractually.  Even though nobody reads online terms of use or ‘wrap’ contracts, courts have held they are enforceable.  At this point, it doesn't even matter whether we read them—if we want to use any Web site, we have to agree to a wrap agreement since the terms on all websites are more or less the same. 

Most people weren't even aware until very recently what information was revealed through online activity and they didn't know they were being tracked and that data could be combined to reveal private information about our identities and habits. Perhaps a new level of concern will be raised by recent media coverage of this problem, and this awareness might help consumers better understand how their information is being collected and used.

Production support for the Academic Minute comes from Newman’s Own, giving all profits to charity and pursuing the common good for over 30 years, and from Mount Holyoke College.

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