In a Techdirt post, Replying To An Email Does Not Create A Contract (And Does Not Require Walmart Pay $600 Billion), Mike Masnick discusses the case of a ridiculous lawsuit filed against Walmart by one David Stebbins. Stebbins’s lawsuit is based on an alleged “contract” on his MySpace page that Walmart allegedly “agreed to” by way of Stebbins sending them an email with a link to it. The faux contract had bizarre terms such as:
My name is David Anthony Stebbins, and I live in Harrison, AR. I am sending a link to this webpage to various companies to put you on notice: If you contact me in any way, shape, or form, you hereby acknowledge that you have read, understand, and agree to be legally bound by the terms below.
[...] This will also take effect if I attempt to contact you, and, upon hearing my name, you do not cease communications with me on the spot.
[...] You hereby agree to allow me to use, distribute, and sell the rights to your name, physical likeness, and any intellectual property that you may own, throughout the universe, for no fee, for all eternity.
You can see that he is trying to use a clickwrap type arrangement to “bind” Walmart. Of course this is absurd, but it actually would seem to be valid if you take the more literalist view of contracts that some libertarians favor–they tend to equate “the contract” with some piece of paper, and say that the parties are bound by “whatever is in the contract.” To avoid such absurd results it is necessary to have a more nuanced understanding of the nature of contractual agreement, as I discuss in my post The Libertarian View on Fine Print, Shrinkwrap, Clickwrap.
As I note there,we have to avoid too formulaic or formalistic or “armchair” arguments–(see The Limits of Armchair Theorizing: The case of Threats). Many libertarians, often with only a crude understanding of the nature of contracts, just assume, Rand-like, some kind of mystical “power” to “bind” oneself by “a contract”. This is incompatible with the Rothbardian title-transfer theory of contract (see A Theory of Contracts: Binding Promises, Title Transfer, and Inalienability). They tend also to equate contracts with a written agreement. This is also mistaken, as I discuss in The Libertarian View on Fine Print, Shrinkwrap, Clickwrap. The written instrument is just evidence of what the actual agreement is, but it is rebuttable or possibly wrong.
So we should not just assume that “whatever is in writing” is part of a binding obligation or enforceable agreement. This bears on the issue of fine print, and so-called shrink-wrap and clickwrap agreements. Libertarians seem to just assume, too quickly in my view, that all such fine print should be enforceable. One problem with click-wrap agreements, for example, is that there is (arguably) often no “meeting of the minds” on the fine print–and the vendor is fully aware of this. If the customers routinely just click the “I have read and agree to these terms” box but never do read it, and the vendor knows this, then it’s a fiction to assume both sides have actually agreed on these terms. For example supposed buried in fine print for a contract for sale of a $20 software program is the provision, “Buyer agrees to give 50% of his income to Vendor for life.” Is this enforceable? Of course not. Why not? Because there was no agreement to this. So the “hidden” terms have to be in some sense reasonable, at the least. (Here, too, “inalienability” concerns may kick in–even if the party is fully aware he is signing away his life income, or his kidney, or life, say, this may not be enforceable for inalienability concerns–see, on this, the contract article noted above, plus my article Inalienability and Punishment.)
I am not saying that clickwrap and fine print is not enforceable–I’m just saying that the libertarian view on property rights and contracts does not require that we formalistically equate “the contract” with “the writing,” and it does not require we figure all this out from our armchairs. The libertarian view can recognize that contracts about consensual, intentional transfers of title; that manifesting such consent is a matter of communication; that making determinations about the nature of a contract, or title transfer, is necessarily a fact-specific, context-bound inquiry. And this kind of more nuanced approach is necessary to explain why Mr. Stebbins’s lawsuit is groundless.
Update: Walt D., writing in the comments below, is right that the two Dilbert cartoons he found are apropos: