Comment by tgsovlerkhgsel
3 years ago
Don't bother. Just ban/declare invalid any surprising clauses, with a regularly updated list of prohibited abusive terms that people try to slip in.
Germany has an explicit rule like that (§ 305c BGB): terms that are so unusual that the counterparty didn't have to expect them are null and void, and any ambiguities are interpreted against the side using reusable T&C's. Terms are further invalid (§ 307 BGB) if they unfairly disadvantage the other party against good faith etc.
The real meat starts in 308 and following, explicitly banning many terms - for example arbitration requirements (309 item 14).
That's exactly how it should work, any legal system worth its salt should base consumer laws on consumer expectations and not any company's opinion. It's too easy for companies to produce a 300 pages document saying "you have no rights to anything, click accept" and that's why terms of services for consumer products cannot work.
Theoretically it already does in the US too. To some extent it does so even in practice. You already can't just write whatever clause you want into a contract, and "contracts of adhesion" are even more limited.
It's just that when we're talking about consumer contracts for such small quantities of money it's hard for a consumer to justify fighting anything at all. In a lot of ways this is the primary problem, not the contracts themselves. You'll never stop companies from trying to do bad things, but the way they can siphon, say, 50 cents worth of annoyance and bad practices away from 100 million people is the relatively new thing that we have no way of handling in our currently super-heavyweight legal system. We don't have anything suitable for dealing with that. Even a class-action lawsuit is hard to justify in such a case, the lawyers would eat 250% of the winnings.
I would say that this is hardly even worth worrying about, if the biggest problem someone has is 50 cents extra to a company you are living a charmed life, except that it at times feels like it's every single company I deal with doing this to me, so it adds up to something quite large. Everybody is getting shaved like this by a large number of companies. But it's hard to deal with, there's no single large locus you can focus on.
I think there are two reasons why it works in practice in Germany:
a) much lower tolerance for this kind of thing - if a company does this, people will consider them scammers, so there is a high cost to repeatedly trying tricks like this
b) the Verbraucherzentralen, consumer rights organizations that can sue on behalf of all consumers (not in the sense of a class action suit, but in the sense of making a company stop an abusive practice). They also generate press releases, leading to the above-mentioned reputational damage.
I'm still disappointed that obvious scams (e.g. hiding a subscription that very few customers would knowingly agree to in the fine print) are handled through this system, instead of the criminal justice system. You still need the civil system for the less egregious cases, but if you send the obvious ones to jail, fewer will try to "dance around the line".
Edit: Completely forgot - your competitors can also sue you/get an injunction to stop you from engaging in unfair business practices.
It's same in France yeah, any term can be tossed if arguably abusive and nothing is set in stone. So ofc we can renege them for a week, they re generally fair etc.
Where I live now, Hong Kong, even oral contracts have value, if it's written you re gonna give your kidney, you better book a surgeon. We cant regret a contract even the first week (they tried to pass a bill on that, it was rejected because inconvenient for companies...).
Surprisingly though, it makes for much more careful people, who care for, and respect, contracts. In France, you dont even have to pay rent, in HK, it's a kick in the ass and your stuff thrown aways a day after the missed deadline.
People have to pay rent in France. Yes, you can’t kick out the non paying renters during winter, and it can take many months to kick people out legally, and some people abuse the rules. But most people pay.
it seems hard to define what unexpected means, and that case laws to establish them would take ages, be difficult to predict for a long time, and can be avoided by the company settling discretely, and prevent any actual precedents.
Legislation should be written so that litigation wouldn't be required to uphold consumer rights.
Imagine similar concept to GDPR, but for consumer rights that must be adhered to, or be fined. You cannot sign away your rights under GDPR, and you automatically get those rights by virtue of being based in Europe.
> it seems hard to define what unexpected means, and that case laws to establish them would take ages, be difficult to predict for a long time, and can be avoided by the company settling discretely, and prevent any actual precedents.
Weirdly enough, this somewhat works in Germany. Sure, I know Lawyers who say that pretty much any T&C has terms that are invalid under this law but society has not collapsed, companies don't get sued constantly and the most egregious terms get ruled against. Sounds nice?
Of course, Germany/EU is a different legal environment than USA so this does not apply 1:1.
Fantastic idea. I don't think it's reasonable to expect every individual to pay $1000 to a lawyer to review every agreement they ever sign, when they're asked to sign a 10-page document full of legalese multiple times a week for ordinary purchases.
You still would need to get a lawyer if the counterpart doesn't share your view, and lawyers are expensive in Germany. For some reason I believe that it's easier to sue in the US than in Germany, from what I get to read online, since I've never got sued or sued anyone.
I think the missing part of the puzzle might be the Verbraucherzentralen, consumer rights organizations that can sue on behalf of all consumers (not in the sense of a class action suit, but in the sense of making a company stop an abusive practice).
Edit: Completely forgot - your competitors can also sue you/get an injunction to stop you from engaging in unfair business practices.
Standard TOS contract anyone can use, and any variations need individual sign off and consent per point.
Sites would then need to decide how many variations to enact, knowing full well every extra one reduces signups.
Standard terms are a good idea. Wales just did this with (housing tenancy) occupation contracts
The problem with standardization of anything in law is that inevitably it slows down innovation a bit. That's obviously not a problem with something like housing, but in tech it might be an issue.
I'd rather have "ideological" bills that explicitly say companies can't take the piss, empowering judges to throw the book at them with liberal interpretations.
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This is genius, a fair and balanced option.
These are a godsend for tenants in Germany. I frequently see these in tenant right content from tenant unions. They say which common clauses can be safely ignored if they create an unbalanced agreement between landlord and tenant.
My old boss described BGB as a masterpiece, and the deeper I dive in German bureaucracy, the more I agree.
Statutory rights is exactly what’s needed, e.g:
* ban mandatory arbitration
* ban “tax recovery charges” on top of advertised prices
Banning mandatory arbitration is actually one of the explicitly listed items in Germany.
I think hidden charges are probably prohibited in a separate law, but basically if you see the price that's the price you pay.
Actually, here it is https://www.gesetze-im-internet.de/pangv_2022/BJNR492110021.... - Google Translate:
(1) Entrepreneurs who offer goods or services to consumers or who advertise goods or services to consumers by stating prices must state the total prices. [...] (3) If a price is broken down, the total price should be highlighted.
(And that "should" is a "shall")
Even with substantial differences, I believe that the principle of <Contra proferentem: "Against the offerer"> described in section 8.4.2 of "Notes on Contract Drafting" (https://toedtclassnotes.site44.com/Notes-on-Contract-Draftin...) also offers a similar level of protection against unexpectedly ambiguous claims.
UK has a similar law.
https://www.legislation.gov.uk/primary+secondary?title=Unfai...
Also a general legal principle that the terms of a contract are interpreted in a way least favourable to the party making the offer where there is doubt as to the interpretation.
I'm aware of these laws but I've always wondered - what if a German startup really does want to operate in a new and "unexpected" way, but doesn't want to trick their customers? They put the unexpected stuff clearly on their website, not buried in the ToS. I don't see any ethical problem with that - people can make an informed choice about whether they want to do business with the company. BUT - it would still have to be in the official ToS and now that unusual stuff would be void.
Doesn't this law prevent startups from developing innovative business models even when they are being upfront about it?
Assuming it’s not an explicitly forbidden clause, from the law [0] translated by deepl:
> (1) Provisions in general terms and conditions are invalid if they unreasonably disadvantage the contractual partner of the user contrary to the requirements of good faith. An unreasonable disadvantage can also result from the fact that the provision is not clear and understandable.
So if the novelty of the startup is an unreasonable disadvantage to the customer, it would be illegal. Which sounds good to me.
[0] https://www.gesetze-im-internet.de/bgb/__307.html
IANAL, but surely if it's a core part of the business and they plainly explain it on the front page, that wouldn't be considered unexpected.
How is "surprising" defined and who decides? Can this be abused sonehow?
The law does contain a bit more specific definitions but not much, it's very much open to interpretation, but that's what judges are for.
It does create uncertainty, and sometimes clauses get declared invalid years later and customers get bitten by statutes of limitations if they didn't sue themselves, but these cases are also really expensive for the companies so it's in their interest to not get too creative.
In practice, it seems to work really well. I'm always astonished how much more on edge I have to be in other countries when agreeing to anything. In Germany, most of the "legal scams" (e.g. subscriptions hidden in fine print) don't exist, or are really easy to get out of.
Usually by the Reasonable Person Test: https://en.wikipedia.org/wiki/Reasonable_person.
It can be pretty subjective, but it often gets clarified with enough common law precedent (which can be amended with a new law if it becomes abused/unfair/odd).
The top level comment is talking about Germany, which is not a common law jurisdiction.
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Good in theory, but how do you deal with slow shifts from unusual to common? eg. I bet arbitration clauses were unusual at one time before the activity became popular.