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Man Sues Gateway Because He Can't Read EULA 666

Scoopy writes "California resident Dennis Sheehan took Gateway to small claims court after he reportedly received a defective computer and little technical support from the PC manufacturer. Gateway responded with their own lawyer and a 2-inch thick stack of legal docs, and claimed that Sheehan violated the EULA, which requires that users give up their right to sue and settle these cases in private arbitration. Sheehan responded that he never read the EULA, which pops up when the user first starts the computer, because the graphics were scrambled — precisely the problem he had complained to tech support in the first place. A judge sided with Sheehan on May 24 and the case will proceed to small claims court. A lawyer is quoted as saying that Sheehan, a high school dropout who is arguing his own case, is in for a world of hurt: 'This poor guy now faces daunting reality of having to litigate this on appeal against Gateway...By winning, he's lost.'"
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Man Sues Gateway Because He Can't Read EULA

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  • by Opportunist ( 166417 ) on Thursday June 07, 2007 @08:03PM (#19431651)
    Seriously. Have you? Can you keep a straight face and tell me you read all those legalese crap? I didn't.

    First of all, it can be summed up into "We may do everything, you may do nothing, essentially, you're a dork for using our software". And second, almost all of them violate our consumer protection laws.

    So, why bother wasting time?
    • by TheRaven64 ( 641858 ) on Thursday June 07, 2007 @08:09PM (#19431711) Journal
      The thing that irritates me most is installers that force you to read and agree to a Free Software license before using the program. Free Software licenses are distribution licenses, not EULAs, and so there is no need to agree to them, or even read them, before using the software.

      • by noidentity ( 188756 ) on Thursday June 07, 2007 @08:12PM (#19431751)
        Mod parent up. An author who makes the GPL/LGPL into an EULA for their program clearly doesn't even understand the license at its most basic level.
        • Re: (Score:3, Informative)

          by bky1701 ( 979071 )
          Actually I had the understanding that a lot of installer makers force you to have an EULA, so they just put the GPL in them trying to be cutesy. I have seen a few that just said "Click 'I agree' below". It's worth noting, here on Linux, the only EULA I ever seen was when I installed flash.
          • Re: (Score:3, Interesting)

            by djmurdoch ( 306849 )
            Actually I had the understanding that a lot of installer makers force you to have an EULA,

            So why not use an open source installer? On Windows Inno Setup [] is very good; it doesn't force you to do this. (R [] offers the GPL in an information screen, with instructions saying "Please read", and "When you are ready to continue, click Next". I think that's about the right level: you want users to be aware of the GPL, but they don't need to accept it to do an installation.)
          • by mrchaotica ( 681592 ) * on Thursday June 07, 2007 @10:06PM (#19432753)

            Then instead of putting COPYING.txt itself in there, they should put the following (or something like it):

            This software is licensed under the GPL. You are not required to agree to, or even read, the GPL before using this software, as it is not an EULA. However, we suggest you do so anyway because it grants you additional rights regarding distribution and modification, which it is to your advantage to be aware of.
        • by Nasarius ( 593729 ) on Thursday June 07, 2007 @08:25PM (#19431889)
          Amen. Unfortunately, that includes such prominent packages as the Windows binary installers for Pidgin and OpenOffice. OOo is particularly bad in that it forces you to read and accept the LGPL before installing. Stupid, stupid, stupid. I'll read the license when I want to do something that's not already implicitly legal, thanks. Stamp it with an open-source logo or something if you want to advertise the fact that this is OSS and not just freeware. Don't propagate the notion that I need your permission to run your software.
      • by wall0159 ( 881759 ) on Thursday June 07, 2007 @08:50PM (#19432109)
        I thought the main reason they did that was for the:

          "this software is not guaranteed in any way"

        part, rather than the

          "if you distribute, then..."

        parts. ie. it's more a disclaimer of responsibility
      • Re: (Score:3, Insightful)

        by siddesu ( 698447 )
        Actually, for people (like me) who read all their licenses this is not a bad thing. That way I can read the license and compare it to other licenses and so it becomes one more incentive to use the free software. I have avoided more than one embarrassment by reading the license, and I have had more than one manager-level/lawyer idiot get embarrassed because THEY didn't know their license.
      • by Rich0 ( 548339 ) on Thursday June 07, 2007 @09:48PM (#19432587) Homepage
        I actually wonder if such a screen puts the distributor in violation of the GPL.

        The GPL requires that users be given the software under the terms of the GPL, with no further restrictions.

        The GPL does not require users to accept it to use the software.

        Software which DOES require the users to accept the GPL to use the software is enforcing a restriction not listed in the GPL.

        Therefore, the software-mandated license acceptance is in violation of the GPL.

        Not sure if this argument would apply if the GPL were taken apart in detail with regard to its restrictions against adding restrictions. I just thought it was an interesting concept...
    • by MyLongNickName ( 822545 ) on Thursday June 07, 2007 @08:22PM (#19431869) Journal
      Absolutely. I am almost done reading an EULA on my other PC. When I am done, I look forward to finishing building my Win 95 system, working off of 3.1 sucks!
    • Re: (Score:3, Insightful)

      by fm6 ( 162816 )
      Of course they're not meant to be read. Most legal documents aren't. Have you read your employment contract? Your rental agreement? Your credit card agreement? But so what? The entire concept of contracts (which the libertarians are so in love with) only works if you accept the legal fiction that everybody reads all the contracts they've committed themselves to. Which is, of course, utterly impossible.

      This guy got lucky (if you can call it luck, since he has no chance of defeating Gateway's lawyers) because
      • by _Sharp'r_ ( 649297 ) <sharper&booksunderreview,com> on Thursday June 07, 2007 @09:58PM (#19432683) Homepage Journal
        I read everything I sign before I sign it. That includes lengthy contracts a home purchase agreement. Of course, I read much faster than the vast majority of people, but that's mostly just practice. It's certainly not "utterly impossible".

        Is general society so bad at reading that most people can't be bothered to look at what they're agreeing to? I suppose so, or else the title company person at my first home purchase wouldn't have had to move us to another conference room once she realized that I was actually going to read things before I signed them. She apparently expected it to take 5 minutes instead of half an hour and had scheduled the room accordingly.

        In any case, the law regarding contracts is that for a contract to be valid, there must have been a "meeting of the minds" where both parties knew substantially what they were agreeing to. Of course, nowadays some people probably sign the statement that they've read and understand the contract without even reading that statement, but some people are stupid that way.

        I have lots of experience with all sorts of times when actually knowing what was in a contract I'd signed was useful, even when simply looking up and reading the VA state law online that pertained to a specific company health insurance provision and pointing it out to HR made their lawyers drop all their demands and sent a letter of profuse apology once they figured out that technically they owed me 3x the amount of a $25K claim they had illegally refused to pay until I signed a subordination agreement that I refused to sign (having read it and recognized it as obligating me to things that they had no right to get out of me), but since you don't read things you probably aren't still reading this anyway.

        Heck, you probably don't read documentation either. You still have that extra set of screws left over from when you built that bicycle that rattles kind of funny?
        • by cgenman ( 325138 ) on Thursday June 07, 2007 @11:27PM (#19433331) Homepage
          I don't think the problem is that most people can't be bothered to look at what they're agreeing to, so much as for the daily things they're supposed to read they by and large have no real recourse to disagree anyway.

          I don't like non-compete agreements, and I don't like "everything you do in your spare time belongs to us" agreements. And while I've argued the former out of contracts, I've never managed to argue the latter, immoral as it may be, because the people I've worked for have had THEIR clients force it upon THEM.

          Similarly, I disagree with certain clauses in the Windows license. But if I didn't agree to the clauses, I'd really be out of a career. I don't agree to "binding arbitration in the state of Virginia" if my VCR explodes and burns my house down, but I can't seem to find a manufacturer who doesn't have that clause written on a sticker on their VCR somewhere. If you buy a video game, take it home, open it, and discover in the EULA that they want to slime your computer with a spyware / monitoring application... what are you going to do? The store sure isn't going to take it back, whatever the heck the click-through license says.

          THIS IS WHY WE HAVE LAWS, PEOPLE! The only, THE ONLY reason for forcing your customers to agree to binding arbitration is to take away their legal rights. Don't put up with this.

      • by Courageous ( 228506 ) on Thursday June 07, 2007 @11:52PM (#19433499)
        Well. I'm a somewhat-libertarian, and I like contracts. Real ones. Such as the ones that require there to exists a true Meeting of the Minds between parties for there to legally exist a contract. Any situation in which a contract is so lengthy that some agent cannot go over every single term with you in utter clarity is no contract at all.

        The modern concept that thwarts what I think is the way it ought to be done is the "Contract of Adhesion"... the notion that says that once a contract is signed, insofar as the terms are reasonable and similar to other such provisions in like contracts, whether or not you knew about the terms is of no concern. I find the Contract of Adhesion to be a villainous development in our laws; it should be done away with entirely in all circumstances.

        With the Contract of Adhesion done away with, even Mortgages Agreements would have to be shortened. Why? The mortgage companies would have to consider the costs of their hourly time in explaining the contract, and the relative merits of their competitors who don't bear such expenses. And so forth.

        The EULA obviously couldn't exist at all. It would require a human in the store at the point of sale to go over it with you.

        To me, if it's not sufficiently important to justify human intervention, it's simply not sufficiently important to justify a contract.

    • Re: (Score:3, Insightful)

      by Alchemar ( 720449 )
      Forget "consumer protection laws", let me refer you to Amendment 7 of the US Constitution:

      In Suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved, and no fact tried by a jury, shall be otherwise re-examined in any Court of the United States, than according to the rules of the common law.

      Maybe I just don't understand how they are defining common law, but how are all these companies getting away with adding a non signed contract that ta
  • How (Score:4, Interesting)

    by obeythefist ( 719316 ) on Thursday June 07, 2007 @08:06PM (#19431679) Journal
    How thoroughly have these agreements been tested in court prior to this event?

    Nobody actually reads EULA's, right? I'd say at least 99.9% of EULAs are just clicked on through without any consideration for the implications.

    Does the reality of 99.9% of cases over-rule the law?
    • Re:How (Score:4, Interesting)

      by Jeffrey Baker ( 6191 ) on Thursday June 07, 2007 @08:40PM (#19432019)
      I'm no attorney and don't really know anything about the law, so please consider my reply at face value. That said, it's difficult for me to imagine how an EULA could seem enforceable to anyone who hasn't been through the law school brainwash. You go to the store and buy some software in a box. Your agreement is with the retailer, not the maker of the software. There doesn't seem to be any way for a third party (the maker of the software) to insinuate itself into the transaction.

      Now that's just me and common sense talking, and I'm aware of the fact that the legal system abandoned common sense at some point in the 20th century, but I believe as a general principle there's no way an EULA could be enforced.
  • by mikee805 ( 1091195 ) on Thursday June 07, 2007 @08:07PM (#19431691)
    Dont companies these days thing its a bad thing to sue their own customers? Let alone make headlines for doing? Really what do they gain?
    • Re: (Score:3, Insightful)

      by wytcld ( 179112 )
      What's the difference between Gateway and HP? They both slap together computers from cheap components. But Gateway's struggling to survive now while HP has pulled ahead of even Dell. So the difference? HP's stuff breaks as often as Gateway's or Dell's, but they're real solid about fixing or replacing it, while with Dell you're likely dealing with someone who nearly speaks English, and with Gateway - well I wouldn't know. Back in the early 90s I used to have my firm buy Gateways, and the warranty replacement
  • Small Claims (Score:5, Informative)

    by stox ( 131684 ) on Thursday June 07, 2007 @08:09PM (#19431703) Homepage
    I'm sure someone will set me straight if I am wrong, but in small claims court, doesn't the complaintant always represent themselves? And that court is structured to deal with such?
    • Re: (Score:3, Insightful)

      by AlterTick ( 665659 )

      in small claims court, doesn't the complaintant always represent themselves? And that court is structured to deal with such?

      Yes, but you can bring a lawyer to represent you if you want, and corporations essentially have no one BUT a lwayer to send. Small claims judges don't like lawyer bullshit gamesmanship, though. If Gateway sends a slick lawyer to try to bring a "world of hurt" down on Sheehan, the judge will tear him (the lawyer) a new asshole. Likely the appeal will consist of the judge telling Gateway "show me proof you didn't sell him a fucked up computer and then try to weasel out of refunding the purchase price, or cra

  • by Evets ( 629327 ) * on Thursday June 07, 2007 @08:09PM (#19431709) Homepage Journal
    This was actually a pretty big win for him, and it means that the case will not drag on for years as the article suggests.

    In California Small Claims (which this case was just kicked down to), an employee or executive of the company must be present at the trial - not a lawyer, and not somebody hired specifically for the purpose of defending the small claims suit.

    If the defendant loses, there is exactly one possible appeal. At the appeal (to superior court), lawyers can appear, but the case is still treated as a small claims case (i.e. you aren't going to get out of it based on a legal technicality if that technicality violates the basic fairness of the case).

    If Gateway doesn't send an employee, the appeal is going to be much harder because they have some pretty serious explaining to do as far as why the appeal should be heard. If they do send an employee, it is still tough because no new evidence can be presented at appeal so they will basically have to say that the judge was wrong and why.

    Either way, this guy will have resolution within 120 days at the far side - as the appealin California for small claims must be filed within 30 days of the case being heard and if the appeal is approved, they put it on the docket pretty quickly.
  • critical mass (Score:5, Insightful)

    by ribman ( 1066628 ) on Thursday June 07, 2007 @08:10PM (#19431719)
    I believe that we may be approaching critical mass (in decades or centuries, not years) within the imposition of legal absurdity upon humankind. I expect that the populace will ultimately become so oppressed by the duress of corporate greed that uses legal thuggery as it's enforcer, that humanity will just quit accepting it and reject the entire premise of law.
    If there is wisdom within the world of corporate law, someone will realise that this is approaching and will work for internal reform, before external reform arrives as a consequence of insults to humanity like this.

    • Re: (Score:3, Insightful)

      by Opportunist ( 166417 )
      More laws create more criminals, but not more legality. Think about it, it will make sense.

      When people don't understand a law, they will not uphold it. Worse, they will not support it, and at the utmost extreme, fight it. For reference, see prohibition laws or the whole legal system of the former Warsaw pact countries.

      The worst thing that can happen to a state is that its subjects reject the whole legal system based on too many stupid laws. When it becomes impossible to NOT break a law, people start ignorin
  • by Trojan35 ( 910785 ) on Thursday June 07, 2007 @08:18PM (#19431815)
    poor guy?

    Poor guy? Yes, create more pity for him. After all, you sold him a defective computer, then refused to fix it. Then let the situation make it all the way to small claims court. You've got him right you want him.
  • by Midnight Thunder ( 17205 ) on Thursday June 07, 2007 @08:19PM (#19431829) Homepage Journal
    Being a computer user is really tough sometimes: Not only do they expect you to be a computer expert, but they also expect you to be a legal expert.
  • by EvilGrin666 ( 457869 ) on Thursday June 07, 2007 @08:19PM (#19431831) Homepage

    A lawyer is quoted as saying that Sheehan, a high school dropout who is arguing his own case, is in for a world of hurt: 'This poor guy now faces daunting reality of having to litigate this on appeal against Gateway...By winning, he's lost.'"
    If that doesn't illustrate everything that's wrong with the US court system, I don't know what does. It's a sad day when the only people who can 'win' are those who can afford it. I, for one, hope he ends up in an appeal court with a sympathetic judge who still believes in the system.
  • by kosmosik ( 654958 ) <kos&kosmosik,net> on Thursday June 07, 2007 @08:22PM (#19431861) Homepage
    > the EULA, which requires that users give up their right to sue

    Is it even possible in US to get in such agreement? I am Polish. ;) I don't know much about US law system but the whole idea looks awkard. In my country you can state whatever bullshit you wish in license agreement or whatever - but it is void unless it is valid with the law. So I could make a license that you own me your liver if you use my software while not drinking milk - but it would be pointless.

    It is possible in US to just make a license that disallows you to sue by the other party? That is kind of retarded - even if it is possible - what it is for?

    I thought that you _ALLWAYS_ have a right to sue (fight for your rights) and nobody can take it from you?
    • by SEE ( 7681 ) on Thursday June 07, 2007 @09:09PM (#19432275) Homepage
      In normal contract situations, the parties can agree that the contract must go to arbitration, not court, in cases of disputes. If you take it to court without going to arbitration, then you're in violation of the terms of the contract, and the court will usually (but not always) require that you take your dispute to the arbitrators specified in the contract. Now, if you're not satisfied with the outcome of the arbitration, you can still sue under the law. However, the courts will usually (but not always) demand that you show evidence the arbitration was flawed before they'll reverse the results of the arbitration, because accepting the arbitration results was implicitly part of the contract.
  • giving up rights (Score:5, Interesting)

    by Anonymous Coward on Thursday June 07, 2007 @08:25PM (#19431893)
    Ya know ... I'm not a big fan of lawyers and stupid lawsuits ... but I'm getting a little sick of giving up all my rights every time I turn around. I've seen this "agree not to sue, and instead, go to binding arbitration with an arbiter of the company's choice" on all sorts of things lately.

    The other day, the cable guy came out. He drops off my HD DVR. He hands me his handheld PC and says "sign here". The thing I'm supposed to sign says something like "I agree to all the stuff above". Of course, I can't scroll up and read anything. So, i ask what I'm signing. He tells me it's that I received the DVR. Grr. OK. So I sign. Then it prints out this huge receipt. Among other things, i've given up my right to sue them.

    To make it worse, they often are worded such that you can never sue them for anything ... EVER ... not just in respect to the immediate business. Hopefully that won't stand up in court.
    • Re: (Score:3, Insightful)

      by RealGrouchy ( 943109 )
      Get a piece of paper, write "I, [Name], have received [product], from [company], in good condition on [date], signed, so and so."

      When the delivery guy complains, he can tell you what it really is that he wants you to sign.

      - RG>
  • by timmarhy ( 659436 ) on Thursday June 07, 2007 @08:27PM (#19431911)
    contracts require the ability to negotiate the terms and talk with the other party. EULA's do not allow this. more so ALL eula's are given to you post purchase of software/hardware, which means you've been forced into agreeing to something without seeing the details first, which is not legal under most contract law.

    i've always had the opinoin that eula's are not legal, and are just used as a bully tactic. i hope this guy wins.

    • by StandardCell ( 589682 ) on Thursday June 07, 2007 @09:52PM (#19432623)
      Unfortunately, the courts might tend to view a EULA as a Contract of Adhesion []. In other words, it's "take it or leave it".

      There's nothing that can be done about these types of contracts that force you into binding arbitration in the context of software other than what this man has argued and similar. In fact, your best realistic choice is to exercise your rights and use the option of not agreeing to the EULA, and shipping the machine back at their expense.

      By doing this, the company incurs significant restocking and repackaging expenses and will eventually (hopefully) learn that such agreements are not worth the cost. This is especially true when you specifically tell them that binding arbitration terms are the primary reason you are returning the unit. Only in this way do we have any hope of stopping these kinds of unfortunately increasingly common practices (other than, of course, legislation).
  • by semiotec ( 948062 ) on Thursday June 07, 2007 @08:32PM (#19431951)

    "This poor guy now faces daunting reality of having to litigate this on appeal against Gateway," Palefsky said. "By winning, he's lost."

    So the take home lesson is that the little guys should never attempt to sue big companies? that even if they have a chance of winning, the big guns will put them "in a world of hurt"? this is how the legal system is supposed work?

  • by codepunk ( 167897 ) on Thursday June 07, 2007 @08:53PM (#19432143)
    HS Dropout or not and I don't care how you look at it he wins no matter what. Just for a lawyer to show it is gonna cost the company 10 times the cost of a new system. When you sue one of these big co's in small claims court they loose no matter what. On top of this ad the bad publicity and they loose 100 times any little monetary claim involved.

    So he goes in and does a crappy job arguing his case and looses, well so what he still cost them
    100 times the cost of a new system, goes home empty but still stuck it to them.
  • by RGRistroph ( 86936 ) <> on Thursday June 07, 2007 @09:01PM (#19432217) Homepage
    I think that this site is relevant to the discussion about EULAs: []
  • by bdemchak ( 1099961 ) on Thursday June 07, 2007 @09:03PM (#19432231)
    Think about it. The legal system is often not about right/wrong or justice. It's about business tactics and business advantage. And that's what Gateway's EULA is about, too. And Gateway doesn't have lawyers write them or defend them out of any sense of justice. It's all about business advantage. So, the weird question is how Gateway expects to win any business advantage. They've already lost a lot of good will on this issue alone. They used to be the underdog goodguy. And now, for any of us who cultivated any sense of denial that they've turned to the dark side, the denial is gone. Whether or not the plaintiff prevails, Gateway loses big. The EULA was the right cross, and the lawyer's intemperate remarks were the knockout punch. This is self-inflicted, Gateway. Bye bye. Sadly.
  • Call 800-369-1409 (Score:3, Insightful)

    by MasterOfGoingFaster ( 922862 ) on Thursday June 07, 2007 @10:10PM (#19432779) Homepage
    I guess if we call Gateway at 800-369-1409 and say something to the effect that you're not going to buy a f**king Gateway PC because of the way they treated customers like Dennis Sheehan, I wonder if they'll rethink things.

    Unlikely.... But I'm gonna call them anyway.... Just for sport.
  • by erroneus ( 253617 ) on Thursday June 07, 2007 @10:58PM (#19433121) Homepage
    And by just taking it up the wazoo, he has lost as well.

    I find it hard to believe that the company would claim they sent him a second computer. Is there not a record of shipment? The plaintiff said he didn't receive a replacement computer. If he had signed for a delivery, surely he wouldn't be stupid enough to say he didn't.

    But here's the thing I'm having trouble with: Company waste. They are paying their attorneys and the courts system way more than the value of system in question. Shouldn't someone be complaining to the board of directors over crap like this? Not only is the direct accounting of the situation bad business, but the potential for further loss through bad faith dealings and bad word of mouth (not to mention appearances on slashdot) presents such a negative value to the shareholders that someone on the board should be voting some executives out of a job.

    I have heard it time and time again on slasdhot that corporations are required by law to create value for the shareholders. Well, here's an example of a corporation acting in a pretty aggressive and vindictive manner costing the company more in direct fees and probably 100 times that in bad word of mouth.
  • by Yalius ( 1024919 ) on Thursday June 07, 2007 @11:17PM (#19433249)
    Wow. Lot of comments keep saying how Gateway has nothing to win here and it would just be a drop in the bucket to pay the guy off. This suit is HUGE for gateway. There's 2 pillars of their business on the line, not just a single defective PC. First, without an enforceable EULA, they have to change their entire business model (as would pretty much every other software and hardware manufacturer in existence); the entire concept of "Licensed" software under different terms than the original contract of sale depends on them. And I don't think that even most Slashdotters really want the severability of hardware and software agreements to go bye-bye. Just the number of comments suggesting installing Linux without ever booting the bundled Windows weighs pretty heavily. Second, although this is pretty minor considering there is already a Supreme Court decision (CIRCUIT CITY STORES, INC. V. ADAMS (99-1379) 532 U.S. 105 (2001)), binding arbitration clauses. Binding arbitration saves on the order of billions in litigation costs, even if the arbitrations go against the respondents. This case will probably never be heard in Small Claims Court. Gateway will appeal the Judge's decision to remand it to SCC, and probably, under terms of the UCC, get a Federal court to assert jurisdiction. Every hardware and software company around will either file amicus curiae briefs, or really want to, in support of Gateway. This remand to SCC is just a diversion, and not a real "win" at all for Sheehan.
  • EULA clauses? (Score:4, Insightful)

    by Kaenneth ( 82978 ) on Friday June 08, 2007 @02:55AM (#19434441) Homepage Journal
    So, how do you decline a EULA?

    Do you just send the item back to the seller?, who pays shipping?

    Imagine if a few hundred people each ordered a new PC, and found they disliked the EULA, so returned them all?

Life in the state of nature is solitary, poor, nasty, brutish, and short. - Thomas Hobbes, Leviathan