Re: [linux-audio-user] Licences are *not* contracts (Was: Re: Free Software vs. Open Source)

From: Frank Wales <frank@email-addr-hidden>
Date: Wed Mar 01 2006 - 00:30:46 EET

On 02/23/2006 01:37 AM, fons adriaensen wrote:
> On Wed, Feb 22, 2006 at 08:17:38PM +0000, Frank Wales wrote:
>> No, it isn't; licences are *not* contracts, and never have been.
> I never said that a license *is* a contract. But when you buy
> a license, and thereby agree to its terms, that act creates
> a contract between you and the entity that grants the license.

I believe you are confusing some distinct issue here. To make my
understanding of these issues clearer to you, here is a story:

Joe buys a piece of software in a shop, takes it home and attempts to
install it. The following dialogue appears on his computer:

   "This software is licensed, not sold. You may only install or
    use this software if you always wear a red hat. You may not
    lend, resell or give away this software. Clicking on the
    'I agree' button below indicates that you have accepted
    these terms. Unless you click 'I Agree', you may
    not install or use the software."

Joe clicks 'I agree' and proceeds to use the software for
its intended purpose. Now answer these questions:

  0) Did Joe accept the conditions presented to him?
  1) Has Joe entered into a contract of licensing with the
     software vendor?
  2) Is Joe required to wear a red hat while using
     the software?
  3) If Joe does not wear a red hat, is he breaking the law
     by using the software?
  4) Once he no longer wishes to use it, can Joe sell his
     copy of the software to his sister Jo?

I believe the answers to these questions, at least in the
USA and the EU, would be:

  0) Maybe, maybe not.
  1) No
  2) No
  3) No
  4) Yes

I base these answers on both legal advice on matters relating
to the acquisition, development and supply of software over
many years, and on my understanding of things like 17 USC 117
and the EU Copyright Directive 91/250/EEC.

As I said before, I am not a lawyer, and this is not legal advice,
but here is my attempt at explaining the above answers.

If I purchase a piece of software, say in a computer shop,
then take it home and get presented with an end-user licence
agreement during installation of that software, the terms
of that licence agreement have no effect on the pre-existing
contract of sale. Vendors simply do not have the right to
arbitrarily modify contracts of sale after the fact.

Moreover, from my perspective, I've purchased a *copy* of
the software, not entered into some kind of sub-licensing
or rental agreement with the vendor. This is just the same
kind of sale that happens if I buy a book or a DVD. Since
everyone involved, up to the point of purchase, acted like
it was a sale, it is, no matter what a piece of paper
inside the box claims about it not being a sale.

The contract of sale happens when the vendor, or their representative,
takes my money and gives me the copy of the software, not at some
random later time when the vendor deigns to present me with a bunch
of conditions.

I am unaware of any other forms of contract between a purchaser
of software and a vendor that might suddenly pop into existence
when a licence is presented to a user, nor does the
earlier act of purchasing connote assent to the subsequent
alteration of the contract of sale by such a licence.

All the relevant legal advice I've had over the years indicates
that the purchaser can take or leave the terms of the licence, and
use the software they've already paid for anyway.

For any licence to have an impact on the contract of sale,
the purchaser must have been fully cognizant of its terms
before payment. That software vendors generally don't make this
possible tells you something about how confident they are in the
reasonableness and enforceability of those terms.

Even if licences were to be presented to purchasers before
the sale, presenting them on a take-it-or-leave-it basis wouldn't help
the vendors' position; they would probably be considered as so-called
"contracts of adhesion", and as such would be much harder for the
vendors to enforce anyway, even with the buyer's signature.

In general (and certainly in the EU and the USA, I believe),
consumers have the right to install, use, back-up, study and reverse
engineer for the purposes of interoperability any software that they
legally acquire a copy of, unless they specifically, and *before*
agreeing to its purchase, negotiate away those rights. Clicking 'I agree'
constitutes neither legal assent, nor a negotiation of any kind.

>> For example, if your local laws already permit you to make copies of
>> a CD for personal use, then an accompanying licence agreement
>> that says you may not copy it is irrelevant, since you already
>> have permission to copy it, and you don't need it again.
>> No matter how much that annoys the CD's creators, they would
>> have no legal power to restrict your copying when the
>> law lets you do it anyway.
> Correct, but that contributes nothing to your point that a
> license is not a contract.

I wasn't trying to bolster that point; I was trying to
indicate that existing laws might already make the whole
licence agreement moot, since you don't have to accept
it to use the product as it is intended to be used.

>> Also, if a licence agreement only grants you permission
>> to do something under certain conditions ("you may only run
>> this software if you don't reverse engineer it"), you might be
>> allowed to do it anyway, since there are many laws that already
>> grant you permission to do things without needing to agree to the
>> licensor's terms.
> There *may* be. That's no reason to assume you have no obligations
> at all.

I wasn't suggesting that one should presume no obligations; however,
a licence *cannot* confer obligations onto you.

>> A contract *can* limit what you can do, but contracts require legal
>> niceties, such as "a meeting of minds" and "consideration",
>> neither of which are possible in a shrink-wrap licence agreement.
> In some circumstances, just raising your hand can create a contract.

In a cattle market, perhaps, but I know of no circumstances where
a contract can exist between parties when there is no "meeting of
minds". This can only exist where both parties are fully aware of
the terms being integrated into an agreement, which simply *cannot*
be the case when a licence is not available to one of the parties
until after the contract is enacted, which is the typical EULA scenario.

> When you buy a CD, or some software, the circumstances are usually
> quite clear.

"Quite clear" for buying software!? Where are you shopping?

To give a counter-example that's germane to audio, certain
famous audio sample libraries are sold in a shrink-wrapped
box that has the following comedy legal sticker on the outside:

   "By opening this product you accept the
    enclosed license agreement"

The enclosed licence agreement includes words to the effect
that you have no right to re-sell the product. The problem
for the vendor is that such a distribution constraint falls
away at the time of first sale in both the EU and the USA,
so such a restriction on the buyer is simply unenforceable.

Moreover, I'm unaware of a court in the civilized world
that would accept that *any* part of the associated licence
agreement was enforceable, precisely because you must first
accept it before you can read it.

Frank Wales [frank@email-addr-hidden]
Received on Wed Mar 1 04:15:05 2006

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