Small Print Can Be Broken

The Red Tape Chronicles has an interesting post about “contracts of adhesion,” which come into play in nearly every purchase you make. It’s called the fine print, and as you know, companies use it to get you to do and not do all sorts of things.

If you want to buy a cellphone, you’ll have to agree not to sue them, and to pay $200 if you quit before your contract is up.

But, as Bob Sullivan asks, will the cellphone company pay you $200 if they go out of business during your contract? And since every company inserts such language, the choice is either to accept the terms, or not get a cellphone, or not rent a car.

However, these provisions can be thrown out if a judge rules them “unconscionable,” but only if someone sues the company first. Since that’s an unlikely proposition for most people, more and more language favorable to the company creeps into the boilerplate.

The Small Print Isn’t Always Binding [The Red Tape Chronicles]
(Photo: *_filippo_*)

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  1. tastic says:

    It’s nearly impossible to have a contractual term (let alone an entire agreement) stricken for unconscionably, unless it is truly an essential service like food, housing or the like.


    Train tickets, cell phone contracts and EULAs don’t fit this category. Although the consumer has vastly unequal bargaining strength (if you think differently, try “negotiating” with your wireless carrier your contract terms before signing it), most courts are reluctant to find that the contract is truly the product of actual coercion. This showing is particularly difficult where there are other providers for the same service. Although all of their contracts may be equally odious, at the end of the day, there is the choice of provider, or pay-as-you-go, or no cell phone at all.

    The best you can do is to limit the term (pay the extra $50 for a one-year vs. a two-year cell phone contract example).

  2. gorckat says:

    Didn’t a judge in CA just obliterate cell phone (or something) EULA’s?

  3. Sam Glover says:

    Although I’m not sure how well this would actually work in practice, I would be willing to volunteer to start challenging all contract that I am subject to for the greater good if you can find me a patron who will keep me from starving while I do this noble work.

  4. sp3nc3 says:

    All the more reason not to carry a contract with your cell service. For those that don’t know it, you can buy a phone from the manufacture and activate it with a carrier without signing a contract.

  5. mac-phisto says:

    @sp3nc3: that’s not entirely true. i know sprint offers month-to-month contracts (for $10 more/month than a contract plan & you may need a deposit), but the agent activation terminal for at&t does not allow an account to be set up initially w/o either a 1 or 2 year term of service. after that period has ended, you can just stay a “free agent” by doing what you recommend.

    the gophone is at&t’s option for a month-to-month (prepaid), but it is significantly more expensive & if you don’t buy a prepackaged gophone, your initial cost can be quite high (~$25 for SIM card, most stores charge as much as $50 for activation, plus cost of phone).

    & keep in mind that the iphone mandates a 2-yr contract w/ its service.

  6. castlecraver says:

    You’d think that at some point, a large enough group of consumers would unionize and refuse to agree to contracts with these predatory and rights-revoking clauses.

  7. andrewsmash says:

    @castlecraver: Unfortunately, that would require the kind of long-term thinking and self-awareness that our modern consumer culture is in the process of obliterating. It would last until the next shiny widget came out.

  8. Crazytree says:

    @gorckat: no. only arbitrations as they relate SPECIFICALLY to the consumers’ right to participate in a class action against the particular carrier.

  9. speedwell (propagandist and secular snarkist) says:

    You know that form they give you when you apply for a job, that says you agree to hold them harmless (indemnify them, actually) for anything untoward that happens while they investigate your references and neb into your credit rating and talk to your ex-girlfriend about your mode of living, etc., etc., and that you have to release all of the people that they talk to from liability for what they say?

    Fat chance I’m going to sign a piece of crap like that. I cross out the language and actually write in that I don’t indemnify anyone for anything. I’ve been asked about it before, and I say (which is true) that a lawyer friend told me it was a bad idea to give people a blank check to do anything they want, especially with your reputation and personal information. I’ve had HR people look at the form like they just saw it for the first time and thank me for pointing it out to them, and say I’m smart to refuse.

    So far it hasn’t, that I know of, kept me from getting jobs. I have a really decent one now that I like. The better the company’s culture, the more they understand that sort of thing. I wouldn’t work for a company that insisted I sign a form releasing them from all liability for everything.

    Oh, and I don’t put my Social Security Number on applications either. I write in, “Will provide to Payroll upon hire.” We are so ready to protect ourself from identity fraud, but we bend over backwards to hand every piece of personal information we can think of to some anonymous flunky we’ll probably never see again. (Yes, I had some underpaid corporate receptionist use my identity to apply for credit. Don’t let it happen to you.)

  10. Karunamon says:

    @gorckat
    If it’s the one i’m thinking of, it involved the online mmo second life, and the “click-wrap” agreement you get when logging in for the first time. In short, the contract was ruled unconscionable(sp?) because of the vastly inferior position that the company put the subscriber in re: disputes with the company. The result of which is that you may now sue the company (instead of doing arbitration) if they lose/steal/delete/whatever your property and it causes actual financial damage to you (seeing as how second life is very commercial oriented, this is likely..)

    A friend of mine, for example, had a large chunk of virtual land deleted, with all objects that were on it. Something like US$200-500 worth of items, and those were just the ones belonging to her. Lawsuits are planned to ensue unless she gets the plot back.

  11. bnuk013 says:

    someone should make a website that sumarizes the fine print of some the most common contracts. something to put cell phone contracts in plain english, summarize the key points and maybe the differences between companies.