[conspire] terms of service, illustrated

[Luke S. Crawford]

On Wed, Aug 31, 2011 at 07:41:43PM -0700, Rick Moen wrote:
> Quoting Luke S. Crawford (lsc at prgmr.com):
> 
> > But speaking as a person who does business, nobody expects the business 
> > to actually exercise those rights under normal circumstances.
> 
> Speaking as a person who does business, and who has studied business law
> in some depth, I know that proposed contracts are a beginning of
> negotiation.  Deirdre could tell you about the laughable clauses in a
> car-sale contract I lined out last year, for example.  (They told us
> we couldn't.  I got up and started to leave.  The sales manager was
> summoned.  We talked.  Adjustments were made.)   Also:

It is the beginning of the negotiation, sure,  For a $5-$20 a month product
like I sell?  there is not enough room for individual negotiations. 
you take it or you don't.  I mean, I'm interested in what customers say;
if they say something is unreasonable, I might change it, but if i change
it, I'll be changing it for everyone.   Not just for one person.  

I think this is similar to the position amazon is in.  There is no 
way amazon could sell the kindle at it's current price and negotiate
with individual customers.   

> > Heck even the most basic of common law 'you have the right to 
> > refuse to do business with'  etc.
> 
> That alleged 'right' is of course something of a myth in many areas of
> business, on account of the public accomodation statutes along with
> other statutory limits.  Which brings me to:
> 
> > But the court of public opinion would have my head on a stick,
> > and rightly so.
> 
> So would statutory limitations on service businesses and the implied
> covenants of good faith and fair dealing (depending on the particulars
> of how the parties behaved).
> 
> So, sorry, it's not just a matter of bad PR.

Hm.  Maybe so.  But with the value of my company?  Sure, if you wanted
to pay someone to sue me, and you were willing to spend a fair sum 
of money on a good lawyer to argue your points, yeah, you could shut me 
down, no question, and fight my lawyer then over who gets the servers and
the smoking hole of a company.  But very likely?  my company isn't worth 
enough to make it profitable, even if you know 100% you will win.

Any likely battle I'm going to be involved with?  very likely
it will be resolved in the court of public opinion.  There isn't
enough value to do otherwise.  

Sure, someone could come at me through small claims, but frankly, if I 
really wronged you and you wanted to put that much effort in to it, you 
could probably do more than five grand worth of damage to me through bad PR. 

This isn't to say I should ignore the legal aspects;  but setting
expectations, I think, is even more important;  and writing in legalese,
while best for the courts, is often not the best way to set expectations 
to non-lawyers. 

> However, getting back to my earlier point, it is _often_ useful to
> examine boilerplate contracts for odd clauses that highlight things the
> other party imagines it might need the right to do, or prevent you from
> doing -- and then figuring out why that is.  Thus, as I said, Kindle
> users should have seen it coming.

Hm.  well, what I'm trying to say is that it's awful hard to come up with a
reasonable contract these days, even when it is your intent to come up
with something reasonable.   

Really, if more people thought like you and spent $200 worth of time
examining the documents that define the contracts of a transaction worth
$300, hopefully there would be economic pressure to make contracts 
less costly to evaluate; otherwise, that's a huge amount of overhead on
any transaction.    But personally?  I'm not willing to nearly 
double the costs of services I buy; so I guess it's one of those
circular things.  Yeah, for big things?  I'll have other people look
them over, but for little things?  I think it's rational, really, to
take a 'screw me and I won't do business with you anymore' stance.  

I mean, I recently got screwed pretty hard by not closely examining
a much higher-value contract.  My upstream gave me a two year contract
on power and rackspace after I said I wanted a contract on the IPs.   
well, there was no mention of IPs on the contract, so guess what?
with about 10 days notice, they are charging me $1.50 per IP on 
3 /24 blocks.  on one hand, sure, that's an important lesson.  I need
to be more careful with contracts (and I've set up a policy where I'm going
to have someone else look at everything before I sign it)   

but, on the other hand, I think it is reasonable for me to be angry.
I think it's reasonable... no, essential that once my current contract
is up that I don't do any more business with this provider.   Because, yeah.
if you lawyer it up, you can almost always pull a fast one on me.  
that doesn't mean I should continue to do business with people who do that
when there are other people who don't.

Providers that screw customers, even if they do it in perfectly legal
ways, even if they said they might screw you in this manner in their
dense contract written in legalese, should be punished in the court of
public opinion.

Oh man, this is getting really long and unwieldy.  But it's a problem
I've thought a lot about, because  really do want a clear contract
that is legally valid, but that sets expectations in a clear way if the
customer only spends a minute skimming it;  those goals, I think,
are in conflict.   I am going to act in a manner that I believe is 
reasonable.   You should be able to tell what I think is reasonable 
by spending only a few minutes going over the contracts that govern 
our relationship.  

I tried to start a thing a while back ago where people could create
reasonable AUPs and Privacy policies, and license them under creative
commons licenses;   I think a few standard ones would be really great;
if many used the same documents, I could say "I'm using document X as my
privacy policy"  and users could go look up public discussions on what
exactly that meant.   

Really, this would require something like the EFF getting involved;  
I'm not going to come up with something good, obviously.   Alexis Ohanin
was involved for a while, but he, too gave up.   I have the universalAUP
domain he registered still, but I have done nothing with it.  

I mean, part of the problem is that especially with something like the
privacy policy, I can't just say "I promise to be reasonable" because
everyone has a different definition of reasonable.  

I mean, right now I have a very minimal privacy policy that has already 
caused me problems:

http://prgmr.com/privacy.txt

the bit about ARIN?  that's new.  When I found that ARIN wouldn't let
me have an IP block without a customer list, I delayed maybe 6 months while
I figured out what to do.  First, I tried opt-in;  I blogged (I should have
emailed)  and asked people to opt-in to being sent to ARIN, which got me 
maybe 5% of my customers.  Then I emailed everyone with an opt-out, which 
got me more than 90% of my customers on board.    

I think emailing everyone saying "I'll give your name out two weeks from
now unless you say otherwise" was pretty scummy, really, but judging from 
what my providers have been doing with my IP space since?  it was likely 
key to the continued viability of my company.  If I didn't have my own 
block, I'd be in much worse shape right now.  I do think my actions were 
better than giving ARIN a false list, or than giving them the real list 
without notifying my customers.   As is, actions my largest upstream 
have taken mean that being slow to switch to my IPs is probably going 
to cost me between $5000 and $10,000 which is painful, but not fatal.
I suspect that if I put it off longer, these costs would have gone up 
exponentially.