The Law of Unintended e-Consequences

This law is certainly not new. Even so, the widely cited mocking definition of a “computer” as “a device designed to speed and automate errors” shows how well this concept is suited to the Digital Age. Certainly, examples of technology projects gone horribly awry are common in the public and private sectors, with ramifications far worse than the situations they were intended to fix. Hershey's software upgrade that caused the candy producer to miss a Halloween season, for example, or Virginia's infamous temporary inability to issue driver's licenses are perhaps two of the best-known fiascos (or at least those that were not hushed up by confidential settlements) (see, www.cio.com/article/31518/Supply_Chain_Hershey_s_Bittersweet_Lesson and www.washingtonpost.com/wp-dyn/content/article/2009/10/13/AR2009101303044.html?wpisrc=newsletter). Domino's Pizza even resorted to creating its own online ordering system after a third-party application “became a real source of pushback” from disgruntled franchisees, according to Domino's CIO (see, http://online.wsj.com/article/SB10001424052748704779704574552080042033284.html).

On the consumer front, an elderly pastor's attempt to cancel his telecommunications service and replace it with a bundled phone and Internet service turned into a major dispute over the confusing terms of the provider's offer ' as it did with 35,000 other customers who filed formal complaints about the perhaps not-so-simple installation offer (see, www.philly.com/philly/business/20091206_Consumer_Watch_Breaking_up_is_hard_to_do.html).

How Courts Use This Law

A recent federal appellate ruling shows how this rule can work in the law, in a case of which the routine factual beginning would not seem a likely candidate for creating precedent. In Cincom Systems v. Novelis Corp., 581 F.3d 431 (6th Cir. 2009; www.ca6.uscourts.gov/opinions.pdf/09a0346p-06.pdf), the Sixth Circuit considered the unexpected consequences of the combination of two entirely routine transactions. Alcan Ohio had licensed software from Cincom Systems pursuant to a common license agreement, the boilerplate that most businesspersons and lawyers click to “Accept” when installing software. The license included a typical prohibition on assignment, a provision intended to maintain the licensor's control over the product. It read that Alcan Ohio “could not transfer its rights or obligations under this Agreement without the prior written approval of Cincom.” When the licensee later did customary internal restructuring and merged with another Alcan division in Texas, with no change in control, presumably for tax and business-planning reasons, it did not seek Cincom's approval, much less get it in writing in advance as the boilerplate required. Apparently no one thought it necessary to seek permission, because the software “remained on the same computer in Oswego, [NY], but in a plant now owned by an entity named Novelis.” Indeed, often in such cases, the assignee and merger survivor treats the deposit of the next month's license payment as the implied consent to the assignment, based on the theory that it is easier to beg for forgiveness after a transgression than it is to ask for permission before making the transgression that will require the begging if the transgression is detected.

Here, however, the result was different. When the licensor discovered that its software was now held by a different legal entity, it did what any firm that listens to its attorneys would do ' it sued. Cincom won copyright-infringement damages of $459,530 for failure by Novelis to obtain prior written consent to the deemed license transfer. With little discussion, the court held that the deemed transfer as a result of the merger to which Cincom had not consented violated copyright law. The court said: “When Alcan Ohio merged with Alcan Texas, the license granted by Cincom solely to Alcan Ohio transferred to the surviving corporation, now known as Novelis. Because Novelis did not abide by the express terms of Cincom's license and gain Cincom's prior written approval, Novelis infringed Cincom's copyright.” Id. In addition to simply enforcing the stated terms of the contract, the court justified its ruling by noting that absent such restrictions, a licensee could become a potential competitor:

Allowing state law to permit the free assignability of patent or copyright licenses would undermine the reward that encourages innovation. This is because any entity desiring to acquire a license could approach either the original inventor or one of the inventor's licensees. Absent a federal rule of decision, state law would transform every licensee into a potential competitor with the patent or copyright holder. In such a world, the holder of a patent or copyright would be understandably unwilling to license the efforts of his work, thereby preventing potentially more efficient uses of the invention by others. Id. at 436. (Emphasis in original.)

In other words, from a business perspective, a corporate restructuring of wholly owned companies, with no substantive changes in ownership or operations, led to a forced renegotiation of a license agreement, on less-favorable terms at best, and most likely a termination of the license ' certainly not an intended consequence of a tax-planning strategy. The court did not even require that the assignee compete with the licensor to justify strict enforcement of the consent requirement. It expressly held: “While it is true that the primary reason for the federal common law rule prohibiting the transfer of a license with authorization is to prevent the license from coming into a competitor's possession, this does not translate into a rule of 'no competitor possession, no foul.'” Id. at 437.

In fairness, not all courts have agreed with the Cincom court's holding concerning the importance of a contractual duty to obtain third-party consents, and instead have allowed the parties to enjoy the benefits of the “intended consequences” of a decision not to ask permission. See, e.g., Netbula, LLC v. Bindview Development Corporation, 516 F.Supp.2d 1137 (N.D.Ca. 2007). Nonetheless, the parties still had to incur the costs of litigating that issue, which probably far exceeded the burden of obtaining the missing consent. Other courts have also required strict adherence to the terms of a contract concerning such required consents, in an asset-purchase context. See, West Willow-Bay Court, LLC v. Robino-Bay Court Plaza, LLC, 2009 Del. Ch. Lexis 181, aff. 2009 Del. Lexis 606 (Del. 2009).

More Than One Way To Go Awry

Other examples of unintended consequences can be found no further than my own firm's practice. In a case in my office, a manufacturer of technologically advanced household fixtures was tripped up by a basic financing document that its staff had signed during a routine lease-purchase equipment-financing arrangement. The equipment lease took as collateral not only the particular equipment being acquired, but all of the company's assets, in a security-agreement clause buried in the form's fine print. While no one remembers at this date why the form was signed, or (more important) why no one took the trouble to read it (or to send it to the company's counsel), certainly the proposed lender read it ' and held up an expensive and long-negotiated company-wide refinancing until the intervening lien could be removed.

Similarly, another firm's delegation of signature authority for its internal IT contracts, such as for its Web site design and phone service, to tech department employees (rather than anyone in the business or legal departments) prevented it from moving to replacement vendors after enduring unsatisfactory service. When counsel eventually had the opportunity to review contracts that were believed to be expiring or terminable, it discovered that “routine” modifications to add or modify service over the years had extended the original term for additional years, locking the company into inadequate and overpriced services. In another case, a contract signed unread by a relatively low-level employee (albeit one with sufficient authority to bind the corporation) based on a common sales pitch that “you can cancel it if you don't want it,” compelled another client to use the unwanted services of a tax-assessment analysis firm ' whose fine print boilerplate imposed a hefty penalty for failure to cooperate with its intrusive procedures or for not using the services.

Of great interest to e-commerce counsel, unintended consequences of the type described in Cincom could occur in connection with domain-name transfers, an e-commerce firm's virtual real estate. For example, Network Solutions' “Registrant Name Change Agreement,” a Schedule to its Service Agreement, requires prior consent for transfers (see, www.networksolutions.com/legal/static-service-agreement.jsp#f). A buyer of an e-commerce firm that does not obtain that consent could, in theory, find itself “virtually evicted,” if it lost the right to use the purchased domain name for failure to comply with the governing boilerplate.

What's Going On?

How could such snafus happen, especially when the licensees are represented by (presumably competent) counsel? At a minimum, each of these situations involved tech contracts that had consequences that were intended, but in addition to those for which the contract was entered into. Certainly, legally binding clauses prohibiting assignment, or extending a contract term, don't wind up in a form by accident or from the wanton activity of a word processor run amok; indeed, people drafting the forms put them there for a business reason. Unfortunately, because that did not happen to be the reason each contract was signed, the contracts were not read or, as in Cincom, even thought to be relevant.

Yet that experience of a contract being read only cursorily, for the economic terms, or ignored totally, is perhaps all too common in e-commerce contracting, especially for normal supply-chain or procurement matters that are now often handled electronically between firms. The expectation of immediate replies in our “Blackberry culture,” even to negotiation of far-reaching legal contracts, is at odds with the deliberate consideration of contract terms presumed by the traditional law of contracts. From that perspective, rulings like Cincom sound like the IT department being sent to the principal's office, or to the traffic cop: Eventually, authority will assert itself over a playground free-for-all.

But even though buying and selling can now be managed much more easily online than in the era of the eight-sheet carbon form, the boilerplate behind the “Click here to agree” or a “terms and conditions” link buried at the bottom of a multi-screen Web page still matters. Just because something is “in the fine print” doesn't make it any less legally binding, or less of a problem when it imposes an unwanted business term (such as the company-wide lien in the equipment-lease case mentioned earlier, or the duty to get a licensor's prior consent to what appeared to be a purely internal corporate restructuring). The fact that the troublesome boilerplate happened to be disclosed through a link to terms and conditions on a separate Web page, or in sections of the contract other than the substantive business-deal terms, doesn't make the parties to the contract any less responsible to read them all or to abide by them. Of course, deceptive placement of such contract terms so that they become difficult to find even for those who want to see them, is another matter entirely ' and such “deception” is often determined to be in the “eye of the beholder” after the fact, in a lawsuit by the firm trying to avoid complying with the contract generally or some “deceptively placed” terms particularly. (Editor's note: For more on this point and topic, see, “Web Site Terms and Conditions,” in the November 2008 edition of e-Commerce Law & Strategy; www.ljnonline.com/issues/ljn_ecommerce/25_7/news/151226-1.html.)

Clarity, Simplicity Offer Prevention, Cure

But the reality that problems arise ' and legal fees must be incurred ' because of such unintended consequences of otherwise normal, everyday business transactions suggests that perhaps the problem lies not with those who fail to click every link or read all the boilerplate before accepting a contract ' just as in the case of the television-service contract that has generated 35,000 complaints. Instead, just as e-commerce has developed its own methods of marketing suited to the medium far different from the static model of the traditional Sears or J. C. Penney wish-book catalog, perhaps a style of contracting suited to the online environment is needed as well.

For example, should egregious (but necessary and typical) clauses each require their own click to accept, just as some loans require that a borrower initial the clauses that give the lender the most rights to collect, such as a confession-of-judgment clause, or waiver of the right to jury trial? Similarly, should the design strategies that animate the best products and services be employed by the legal department, as well as by the marketers, to create informative and usable online contracting documents? I recently noted that my own Internet service provider has begun to highlight the terms “UPDATED Terms of Service” and “UPDATED Privacy Policy” on each page of its Web site (emphasis in original). Extensive use of such techniques as eye-friendly fonts, clearly marked bullet points, and thorough use of indentation and separate paragraphs, rather than the traditional compression of clauses into dense, lengthy chunks to fit them all onto the back side of a single sheet of paper, would help make online contracting easier for those who actually want to read the terms. Plain English would be better. For instance, just as its devices have defined style and ease of use, Apple's terms-and-conditions page, while long, clearly indexes each aspect of its forms and the different options available, making it easy for the user to quickly find the desired clause (see, www.apple.com/legal).

In fact, corporate lawyer Ken Adams has written A Manual of Style for Contract Drafting to improve the process of drafting contracts and maintains a blog on the topic (www.adamsdrafting.com). While a complete application of his principles to drafting contracts for use in e-commerce is beyond the scope of this article, Adams touches on online contracts in some of his writing, and the importance of presentation for meaning and clarity. He specifically warns of the problem of “virtual attachments,” i.e., Web pages incorporated or referenced in traditional contracts, such as the risk of unilateral amendment of a contract by changing the referenced Web page. He also notes that the ABA Cyberspace Committee announced plans to develop model forms of online contracts in 2008 (see, http://aba-cyberspace.blogspot.com/2008/07/new-opportunity-to-develop-model.html and http://meetings.abanet.org/webupload/commupload/CL320000/relatedresources/CLC_Projects_Feb2008.pdf), although it appears that the committee has turned to more mundane issues of online-contract interpretation than to refining a form for routine use in e-commerce.

Similarly, Edward Tufte, an academic, has devoted a career to the improvement of the graphic presentation of information (see, www.edwardtufte.com/tufte), and at least one author has summarized the application of Dr. Tufte's principles to Web-site design (see, www.washington.edu/computing/training/560/zz-tufte.html). Presumably, Dr. Tufte's strategies for making information more understandable could be applied to online contracts and their content, as well as to the Web sites governed by those contracts. Dr. Tufte himself, in a widely cited critique of PowerPoint presentations, emphasizes that content must trump style, but that poor style will prevent comprehension of the content, a critique that could be leveled even more accurately and often at a typical online contract than at traditional printed prose communications ' contracts included (see, www.wired.com/wired/archive/11.09/ppt2.html).

Lessons to Learn

Perhaps the lessons for e-commerce counsel from the “parade of horribles,” such as occurred in the Cincom case, and the drafting and creation strategies of thinkers such as Messrs. Adams and Tufte, are twofold.

First, there can be no substitute for reading the words ' and the reader should be someone with sufficient training and experience to recognize the difference between meaningless boilerplate and provisions having meaningful consequences (whether good or bad). Simply using a form because someone else has used it, much less thinking about whether it makes sense to post it online, does not aid anyone in reaching an effective, comprehensible agreement.

Second, creating a contract to be read and viewed online is not (and should not) be the same as doing so for one intended to be looked at on paper. Techniques that are relics of the limitations of paper-based contracts ' using small fonts and compressed text to fit an entire agreement on the back of one page, for example ' need not be used in e-commerce. Yet, often when contracts created for the paper world are simply posted on a Web site in .pdf form, the drafter perpetuates the consequences, intended or not, of the original medium, without employing the techniques that would easily bring the potentially preferable consequences arising from the possibilities that the online format permits (such as the detailed outline available at www.apple.com/legal).

Thinking about how users will access and use an agreement online with the same attention to user-friendliness as the marketing department might ponder should lead to a better online experience ' and only intended consequences from deals made online.

Imagine that.

Everyone who has ever worked on a tech project, whether in e-commerce or general business, has probably seen situations in which an assumed solution creates a bigger mess than the original problem. The military even coined a now widely used term for this situation ' SNAFU ' with which many people are familiar, but maybe not of its origins or full meaning (see, http://en.wikipedia.org/wiki/SNAFU).

Scholars have created a more formal statement of the same law of human ' and machine ' nature: the law of unintended consequences. Best-selling author Stephen J. Dubner and economist Steven D. Levitt have discussed this behaviorial principle extensively in their books and New York Times columns (see, www.nytimes.com/2008/01/20/magazine/20wwln-freak-t.html?_r=2&ref=magazine&oref=slogin, and www.marginalrevolution.com/marginalrevolution/2008/01/the-law-of-unin.html).

Old Hat, New Fashions

This law is certainly not new. Even so, the widely cited mocking definition of a “computer” as “a device designed to speed and automate errors” shows how well this concept is suited to the Digital Age. Certainly, examples of technology projects gone horribly awry are common in the public and private sectors, with ramifications far worse than the situations they were intended to fix. Hershey's software upgrade that caused the candy producer to miss a Halloween season, for example, or Virginia's infamous temporary inability to issue driver's licenses are perhaps two of the best-known fiascos (or at least those that were not hushed up by confidential settlements) (see, www.cio.com/article/31518/Supply_Chain_Hershey_s_Bittersweet_Lesson and www.washingtonpost.com/wp-dyn/content/article/2009/10/13/AR2009101303044.html?wpisrc=newsletter). Domino's Pizza even resorted to creating its own online ordering system after a third-party application “became a real source of pushback” from disgruntled franchisees, according to Domino's CIO (see, http://online.wsj.com/article/SB10001424052748704779704574552080042033284.html).

On the consumer front, an elderly pastor's attempt to cancel his telecommunications service and replace it with a bundled phone and Internet service turned into a major dispute over the confusing terms of the provider's offer ' as it did with 35,000 other customers who filed formal complaints about the perhaps not-so-simple installation offer (see, www.philly.com/philly/business/20091206_Consumer_Watch_Breaking_up_is_hard_to_do.html).

How Courts Use This Law

A recent federal appellate ruling shows how this rule can work in the law, in a case of which the routine factual beginning would not seem a likely candidate for creating precedent. In Cincom Systems v. Novelis Corp. , 581 F.3d 431 (6th Cir. 2009; www.ca6.uscourts.gov/opinions.pdf/09a0346p-06.pdf ), the Sixth Circuit considered the unexpected consequences of the combination of two entirely routine transactions. Alcan Ohio had licensed software from Cincom Systems pursuant to a common license agreement, the boilerplate that most businesspersons and lawyers click to “Accept” when installing software. The license included a typical prohibition on assignment, a provision intended to maintain the licensor's control over the product. It read that Alcan Ohio “could not transfer its rights or obligations under this Agreement without the prior written approval of Cincom.” When the licensee later did customary internal restructuring and merged with another Alcan division in Texas, with no change in control, presumably for tax and business-planning reasons, it did not seek Cincom's approval, much less get it in writing in advance as the boilerplate required. Apparently no one thought it necessary to seek permission, because the software “remained on the same computer in Oswego, [NY], but in a plant now owned by an entity named Novelis.” Indeed, often in such cases, the assignee and merger survivor treats the deposit of the next month's license payment as the implied consent to the assignment, based on the theory that it is easier to beg for forgiveness after a transgression than it is to ask for permission before making the transgression that will require the begging if the transgression is detected.

Here, however, the result was different. When the licensor discovered that its software was now held by a different legal entity, it did what any firm that listens to its attorneys would do ' it sued. Cincom won copyright-infringement damages of $459,530 for failure by Novelis to obtain prior written consent to the deemed license transfer. With little discussion, the court held that the deemed transfer as a result of the merger to which Cincom had not consented violated copyright law. The court said: “When Alcan Ohio merged with Alcan Texas, the license granted by Cincom solely to Alcan Ohio transferred to the surviving corporation, now known as Novelis. Because Novelis did not abide by the express terms of Cincom's license and gain Cincom's prior written approval, Novelis infringed Cincom's copyright.” Id. In addition to simply enforcing the stated terms of the contract, the court justified its ruling by noting that absent such restrictions, a licensee could become a potential competitor:

Allowing state law to permit the free assignability of patent or copyright licenses would undermine the reward that encourages innovation. This is because any entity desiring to acquire a license could approach either the original inventor or one of the inventor's licensees. Absent a federal rule of decision, state law would transform every licensee into a potential competitor with the patent or copyright holder. In such a world, the holder of a patent or copyright would be understandably unwilling to license the efforts of his work, thereby preventing potentially more efficient uses of the invention by others. Id. at 436. (Emphasis in original.)

In other words, from a business perspective, a corporate restructuring of wholly owned companies, with no substantive changes in ownership or operations, led to a forced renegotiation of a license agreement, on less-favorable terms at best, and most likely a termination of the license ' certainly not an intended consequence of a tax-planning strategy. The court did not even require that the assignee compete with the licensor to justify strict enforcement of the consent requirement. It expressly held: “While it is true that the primary reason for the federal common law rule prohibiting the transfer of a license with authorization is to prevent the license from coming into a competitor's possession, this does not translate into a rule of 'no competitor possession, no foul.'” Id. at 437.

In fairness, not all courts have agreed with the Cincom court's holding concerning the importance of a contractual duty to obtain third-party consents, and instead have allowed the parties to enjoy the benefits of the “intended consequences” of a decision not to ask permission. See , e.g. , Netbula, LLC v. Bindview Development Corporation , 516 F.Supp.2d 1137 (N.D.Ca. 2007). Nonetheless, the parties still had to incur the costs of litigating that issue, which probably far exceeded the burden of obtaining the missing consent. Other courts have also required strict adherence to the terms of a contract concerning such required consents, in an asset-purchase context. See, West Willow-Bay Court, LLC v. Robino-Bay Court Plaza, LLC, 2009 Del. Ch. Lexis 181, aff. 2009 Del. Lexis 606 (Del. 2009).

More Than One Way To Go Awry

Other examples of unintended consequences can be found no further than my own firm's practice. In a case in my office, a manufacturer of technologically advanced household fixtures was tripped up by a basic financing document that its staff had signed during a routine lease-purchase equipment-financing arrangement. The equipment lease took as collateral not only the particular equipment being acquired, but all of the company's assets, in a security-agreement clause buried in the form's fine print. While no one remembers at this date why the form was signed, or (more important) why no one took the trouble to read it (or to send it to the company's counsel), certainly the proposed lender read it ' and held up an expensive and long-negotiated company-wide refinancing until the intervening lien could be removed.

Similarly, another firm's delegation of signature authority for its internal IT contracts, such as for its Web site design and phone service, to tech department employees (rather than anyone in the business or legal departments) prevented it from moving to replacement vendors after enduring unsatisfactory service. When counsel eventually had the opportunity to review contracts that were believed to be expiring or terminable, it discovered that “routine” modifications to add or modify service over the years had extended the original term for additional years, locking the company into inadequate and overpriced services. In another case, a contract signed unread by a relatively low-level employee (albeit one with sufficient authority to bind the corporation) based on a common sales pitch that “you can cancel it if you don't want it,” compelled another client to use the unwanted services of a tax-assessment analysis firm ' whose fine print boilerplate imposed a hefty penalty for failure to cooperate with its intrusive procedures or for not using the services.

Of great interest to e-commerce counsel, unintended consequences of the type described in Cincom could occur in connection with domain-name transfers, an e-commerce firm's virtual real estate. For example, Network Solutions' “Registrant Name Change Agreement,” a Schedule to its Service Agreement, requires prior consent for transfers (see, www.networksolutions.com/legal/static-service-agreement.jsp#f). A buyer of an e-commerce firm that does not obtain that consent could, in theory, find itself “virtually evicted,” if it lost the right to use the purchased domain name for failure to comply with the governing boilerplate.

What's Going On?

How could such snafus happen, especially when the licensees are represented by (presumably competent) counsel? At a minimum, each of these situations involved tech contracts that had consequences that were intended, but in addition to those for which the contract was entered into. Certainly, legally binding clauses prohibiting assignment, or extending a contract term, don't wind up in a form by accident or from the wanton activity of a word processor run amok; indeed, people drafting the forms put them there for a business reason. Unfortunately, because that did not happen to be the reason each contract was signed, the contracts were not read or, as in Cincom, even thought to be relevant.

Yet that experience of a contract being read only cursorily, for the economic terms, or ignored totally, is perhaps all too common in e-commerce contracting, especially for normal supply-chain or procurement matters that are now often handled electronically between firms. The expectation of immediate replies in our “Blackberry culture,” even to negotiation of far-reaching legal contracts, is at odds with the deliberate consideration of contract terms presumed by the traditional law of contracts. From that perspective, rulings like Cincom sound like the IT department being sent to the principal's office, or to the traffic cop: Eventually, authority will assert itself over a playground free-for-all.

But even though buying and selling can now be managed much more easily online than in the era of the eight-sheet carbon form, the boilerplate behind the “Click here to agree” or a “terms and conditions” link buried at the bottom of a multi-screen Web page still matters. Just because something is “in the fine print” doesn't make it any less legally binding, or less of a problem when it imposes an unwanted business term (such as the company-wide lien in the equipment-lease case mentioned earlier, or the duty to get a licensor's prior consent to what appeared to be a purely internal corporate restructuring). The fact that the troublesome boilerplate happened to be disclosed through a link to terms and conditions on a separate Web page, or in sections of the contract other than the substantive business-deal terms, doesn't make the parties to the contract any less responsible to read them all or to abide by them. Of course, deceptive placement of such contract terms so that they become difficult to find even for those who want to see them, is another matter entirely ' and such “deception” is often determined to be in the “eye of the beholder” after the fact, in a lawsuit by the firm trying to avoid complying with the contract generally or some “deceptively placed” terms particularly. (Editor's note: For more on this point and topic, see, “Web Site Terms and Conditions,” in the November 2008 edition of e-Commerce Law & Strategy; www.ljnonline.com/issues/ljn_ecommerce/25_7/news/151226-1.html.)

Clarity, Simplicity Offer Prevention, Cure

But the reality that problems arise ' and legal fees must be incurred ' because of such unintended consequences of otherwise normal, everyday business transactions suggests that perhaps the problem lies not with those who fail to click every link or read all the boilerplate before accepting a contract ' just as in the case of the television-service contract that has generated 35,000 complaints. Instead, just as e-commerce has developed its own methods of marketing suited to the medium far different from the static model of the traditional Sears or J. C. Penney wish-book catalog, perhaps a style of contracting suited to the online environment is needed as well.

For example, should egregious (but necessary and typical) clauses each require their own click to accept, just as some loans require that a borrower initial the clauses that give the lender the most rights to collect, such as a confession-of-judgment clause, or waiver of the right to jury trial? Similarly, should the design strategies that animate the best products and services be employed by the legal department, as well as by the marketers, to create informative and usable online contracting documents? I recently noted that my own Internet service provider has begun to highlight the terms “UPDATED Terms of Service” and “UPDATED Privacy Policy” on each page of its Web site (emphasis in original). Extensive use of such techniques as eye-friendly fonts, clearly marked bullet points, and thorough use of indentation and separate paragraphs, rather than the traditional compression of clauses into dense, lengthy chunks to fit them all onto the back side of a single sheet of paper, would help make online contracting easier for those who actually want to read the terms. Plain English would be better. For instance, just as its devices have defined style and ease of use, Apple's terms-and-conditions page, while long, clearly indexes each aspect of its forms and the different options available, making it easy for the user to quickly find the desired clause (see, www.apple.com/legal).

In fact, corporate lawyer Ken Adams has written A Manual of Style for Contract Drafting to improve the process of drafting contracts and maintains a blog on the topic (www.adamsdrafting.com). While a complete application of his principles to drafting contracts for use in e-commerce is beyond the scope of this article, Adams touches on online contracts in some of his writing, and the importance of presentation for meaning and clarity. He specifically warns of the problem of “virtual attachments,” i.e., Web pages incorporated or referenced in traditional contracts, such as the risk of unilateral amendment of a contract by changing the referenced Web page. He also notes that the ABA Cyberspace Committee announced plans to develop model forms of online contracts in 2008 (see, http://aba-cyberspace.blogspot.com/2008/07/new-opportunity-to-develop-model.html and http://meetings.abanet.org/webupload/commupload/CL320000/relatedresources/CLC_Projects_Feb2008.pdf), although it appears that the committee has turned to more mundane issues of online-contract interpretation than to refining a form for routine use in e-commerce.

Similarly, Edward Tufte, an academic, has devoted a career to the improvement of the graphic presentation of information (see, www.edwardtufte.com/tufte), and at least one author has summarized the application of Dr. Tufte's principles to Web-site design (see, www.washington.edu/computing/training/560/zz-tufte.html). Presumably, Dr. Tufte's strategies for making information more understandable could be applied to online contracts and their content, as well as to the Web sites governed by those contracts. Dr. Tufte himself, in a widely cited critique of PowerPoint presentations, emphasizes that content must trump style, but that poor style will prevent comprehension of the content, a critique that could be leveled even more accurately and often at a typical online contract than at traditional printed prose communications ' contracts included (see, www.wired.com/wired/archive/11.09/ppt2.html).

Lessons to Learn

Perhaps the lessons for e-commerce counsel from the “parade of horribles,” such as occurred in the Cincom case, and the drafting and creation strategies of thinkers such as Messrs. Adams and Tufte, are twofold.

First, there can be no substitute for reading the words ' and the reader should be someone with sufficient training and experience to recognize the difference between meaningless boilerplate and provisions having meaningful consequences (whether good or bad). Simply using a form because someone else has used it, much less thinking about whether it makes sense to post it online, does not aid anyone in reaching an effective, comprehensible agreement.

Second, creating a contract to be read and viewed online is not (and should not) be the same as doing so for one intended to be looked at on paper. Techniques that are relics of the limitations of paper-based contracts ' using small fonts and compressed text to fit an entire agreement on the back of one page, for example ' need not be used in e-commerce. Yet, often when contracts created for the paper world are simply posted on a Web site in .pdf form, the drafter perpetuates the consequences, intended or not, of the original medium, without employing the techniques that would easily bring the potentially preferable consequences arising from the possibilities that the online format permits (such as the detailed outline available at www.apple.com/legal).

Thinking about how users will access and use an agreement online with the same attention to user-friendliness as the marketing department might ponder should lead to a better online experience ' and only intended consequences from deals made online.

Imagine that.