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  1. #1

    Question What to do against an abusive EULA?

    We are currently facing an incomfortable situation with a famous company here.
    The quality of their product is seriously questionnable and their abusive EULA isn't allowing their customers to resell (or simply transfer), rent or lease their license.
    We are sitting actually on several top licenses of this product that we bought during business acquisitions in 2004-2005.
    This company is simply not allowing us to resell all these extra licenses (somewhat like 10). This is a DEFINITIVE NO!
    I can sincerely understand why this company is hiding behind its drastic EULA.
    If they allowed only one of their customers to resell his license right (or transfer it or whatever), many others, mainly the decepted or abused customers, will also ask to do it as well... and assurely will try to sell them. This will lead to a licenses inflation on a second market, as long as many users will try to resell their licenses at discounted prices, leading this company into a big loss of sales and certainly, within a short period, to a bigger problem to maintain and update its product/employee.
    This should encourage them to find friendly solutions with their customers beside their strong EULA. But it seems there is no way to get any deal with this company.

    Anyway, the purpose of my thread is to get informations concerning EULA.
    As it says itself, this is more an agreement than a law.
    But what are the fields and limitations of such a document?
    Will a class action lawsuit let us gain advantadge over this inacceptable EULA? (as long as I am sure many other customers will join the boat - only today I chatted with 5 that totally agreed my purposes...)
    Should we fill a complaint to the Federal Trade Commission for Unfair Business Practice?
    Are there some indications that have to be annoted into this document (such date of last modification or alternative or whatever...)?

    Of course, we would have prefered to resolve this friendly (and I am sure I already saw peoples allowed by the past to sell such licenses) but this company chose the way of the turn around (I had to wait 3 weeks, send everyday, at least, an email, I was forwarded to almost each services of this company) before giving me the final answer: "We are sorry but these licenses are not transferrables. Others are (the cheapest one) but yours are not... "
    In other words, the EULA only applies if you have the most expansive license. Sic.

    What can be done there?
    Is there any chance to see our request granted?
    Any advice will be greatly appreciated.
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  2. #2
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    Usually you are responsible for due diligence when accepting licence terms. Some EULA terms have been found by courts to be unacceptable but are usually specific to jurisdictions. This is rare though and not to be releid on. My best advice is to consult your lawyer, rather than a forum such as this (as knowledgeable as it's membership may be).
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  3. #3
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    I am not an attorney, but believe that most EULAs will be upheld in court. It is an agreement that was accepted when the software was purchased. I would think that your best bet would be to try and contact somebody in the business who can make decisions and try to work a deal with them. Maybe you can transfer the licenses if a transfer fee is paid.

    Good luck.

  4. #4
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    I wonder how many people reading this don't know who the company is.
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  5. #5
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    The EULA is protecting the company and it's software. If you had to accept their EULA during the ordering process, then there is usually nothing that can be done.

    I'll echo what Dacsoft said. Try and cut a deal with them.
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  6. #6
    Anyway, the purpose of my thread is to get informations concerning EULA.
    As it says itself, this is more an agreement than a law.
    But what are the fields and limitations of such a document?
    Though being called an agreement, EULA is a typical legal contract with all the consequences of violating it.
    Can you share the name of the company?

  7. #7
    Thanks to all of you.

    I asked here previously because we are outside the US, in Europa, and I was interrested to get the point of views from peoples inside the US.
    Anyway, We already contacted an US legal advisor.
    I guess it only needs time before considering the whole situation and give us an answer.
    I sincerely don't know what are our chances.
    Seems that an EULA can be aubsive and, although, legal and applicable.
    At least, there, in the US.
    Therefor, companies can hide behind it, even if the service/software they provide do not fulfill all the requirements/promises done by the past.

    I only have one request here.
    Even if many of you know about which company I am talking about (then it'll consolidate me in the idea their EULA is abusive ), please, respect their anonymity.
    If something can be done, I'll update this thread and invite you to join us.
    Otherwise, this will remain sealed and won't hurt their reputation or their business.
    This is not an angry or a diffamatory post. No, absolutely not.
    I am only asking what can be done against an EULA we judged abusive.
    So, please, no allegations concerning this company.
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  8. #8
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    You'll find it quite standardard that software EULA prohibit the reselling of them - because what's to stop you selling the licenses to someone else, and you continuing to use them? Nothing usually.

    MS don't permit you to sell on your Windows license AFAIK - the only way it can be done with the corporate licenses is due to a loophole concerning bankruptcy and liquidation AFAIK.
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  9. #9
    I agree and can't agree too.
    This software is encrypted and have an online license verification process.
    According to this, the developper is sure that only 1 license can be used.
    As said, if they were confident enough in their product, I am sure they will allow license transfers (you said that many companies prohibit this but also many companies allow it. Only 1 example comes in mind: vBulletin.)
    But I guess they are, before everything, protecting their business from any license availability inflation on a second market. Which is quiet normal.
    I understand EULA is done to protect both sides, the developper and the customer.
    But actually, it seems that only the developper is protected by this agreement and us, as customer, we have no way to prevail our rights.
    Though this is stated in this EULA that transfers aren't allowed "...without written approval..."!
    In other words, peoples may be allowed to transfer their license, on a case by case at the own developper's discretion.
    But, for an obvious reason, we weren't allowed to transfer ours.
    Last edited by WebDomain.com; 11-10-2006 at 06:42 AM.
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  10. #10
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    Would love to know what software you're talking about.
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  11. #11
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    If you think for a few minutes you can probably come up with a good guess.
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  12. #12
    Well, I'll take a stab at guessing what company it is.

    We have an "unlimited" ModernBill license that was recently changed by them so that it can no longer be sold or transferred.

    When we purchased the license (several years ago), their EULA did allow transfers. Now they recently changed it, and we are stuck with a license that we don't use and can't sell.

    It is worth noting that you CAN transfer other license types. It is only the unlimited license that was changed and we can't transfer any more. The logic behind this decision (according to the owner of the modernbill company) is that they no longer offer the unlimited license...

    ModernBill = crooks
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  13. #13
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    The only people that think this is unfair are those that what to get their money back by selling the license to someone else. And since you purchased 10, you believe they are crooks. If the EULA states no transfers, then what do you think the outcome will be?

    More than likely, this company instated the no transfer policy to possibly phase out this license type, or stop having to do all the transfer work and get paid nothing for it.
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  14. #14
    Quote Originally Posted by Internet54
    The only people that think this is unfair are those that what to get their money back by selling the license to someone else.
    Well, of course. The whole point of selling/transfering a license to someone else is to get money for the sale.

    Quote Originally Posted by Internet54
    More than likely, this company instated the no transfer policy to possibly phase out this license type, or stop having to do all the transfer work and get paid nothing for it.
    I'd be happy to pay a small transfer fee to cover the admin cost of having them click a button to allow a different hostname to use the license.

    It doesn't matter what is the reason they changed their EULA and now do not allow transfers. The fact of the matter is that what they have done is basically steal from us by no longer allowing us to recoup our costs by selling the software. When we purchased the software, it was allowed to transfer, thus the software carried some ongoing value... but now they have changed their EULA, and the software is worthless.

    Only crooks steal something of value. And that's what has happened here.

    Modernbill has bad business ethics. (Not to mention the fact they are currently charging people to beta test their new software version... but that's a whole other can of worms.)
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  15. #15
    Quote Originally Posted by Internet54
    The only people that think this is unfair are those that what to get their money back by selling the license to someone else. And since you purchased 10, you believe they are crooks. If the EULA states no transfers, then what do you think the outcome will be?

    More than likely, this company instated the no transfer policy to possibly phase out this license type, or stop having to do all the transfer work and get paid nothing for it.
    First of all, we didn't buy 10 licenses. We got them with small businesses we acquired. Which is slighty different!
    Secondly, why such an abusive EULA when the sofwtare is encrypted, a license verification process allows only 1 license active at a time on a defined url and, above all, a recurring support fee is charged?

    Sincerely...
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  16. #16
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    1. The software being encrypted has nothing to do with the EULA.

    2. Clientexec has an owned license, but you must pay for support and future upgrades as well. It's part of the terms of the license.

    I would honestly like to see everyone be able to transfer the licenses, but if the don't allow it, what are you supposed to do? A lawyer will get nowhere.
    The EULA is the law of Modernbill's land.
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  17. #17
    You are partly right and mostly wrong, I54.
    I received yesterday an email from an user (maybe a lawyer) linking to many interresting articles.
    EULA's are contracts.
    Even if they may, at a defined time, prevail on general laws, they are definitively not laws. Wherever and whenever, even in a so-called "land".
    And if many of them drop fundamental comsumer's rights, a lot more are simply unlawful.
    As an example, you can read the famous "Dangerous Terms: A User's Guide to EULAs" by Annalee Newitz on the EFF website. To point out only a few arguments, you'll find there how the "Do not reverse-engineer this product", the "By signing this contract, you also agree to every change in future versions of it" or the "We are not responsible if this product messes up your computer" are simply abusive terms and, unfortunately, present in many software EULA's actually.

    This is mainly the purpose of this thread. And it is still now its purpose.
    What can be done against an abusive EULA?

    What is funny (let's say, almost funny!) is, the more we are asking about EULA and the more we reveal how abusive they can be and difficult for the customer to counter.

    Honestly, is that a fair trade practice?
    How would you react if any representative came to your house with the following contract:
    "Hi, Buy my product (of course you have the choice but mine is the best because there is no other), give me your money, accept my rules, use my product in the limits I defined, give my your first son, a night with your wife, don't vote democrat and, of course, you have the right to keep the silence..."

    Will this contract unlawful?

    You'll answer, of course, that you may choose to not sign this contract or not buy this product. And you'll be right.
    But what if those lines was among a 60 pages document, in micro caracters?
    As long as you'll sign up this contract, you'll be .... ****ed? (sorry I didn't find any other relevant word!)

    In our case, the developper may alow the license transfer. As said "with a written approval".
    But how this approval is regulated? Or, at least, defined?
    Nobody knows. Unless God himself.

    Now, do you believe sincerely that developpers would write such EULAs, if consumer begun to read them carrefully?

    Would you honestly invest several hundreds of dollars in a product you won't be able to modify to fit your needs, that can hurt you computer at your own risk and, not the less, you won't be allowed to resell if you are decepted with?
    And don't answer, please, that most developpers propose a 15-days money back guarantee. Problems occur usually several weeks and months after your order. And often not by the product itself but with the seller commercial policy or the insufisant support.

    To my own point of view, this is simply abusive and respectless for the consumer himself.

    So, again, I invite all of you to begin to read carrefully the EULAs before accepting them. And simply refuse them if they harm your fundamental consumers rights. If their sales begin to decrease, abusing developpers may change their attitude in respect of a fair business practice. And not anymore in the way to protect their *** and bump yours.

    Don't say there are no other solutions for the developpers to protect their business. Many examples of Fair EULAs exist.

    I linked below several resources talking about this topic. This may enlight your fire:

    Americans for Fair Electronic Commerce Transactions (AFFECT), an organization that opposes unfair clickwrap terms and organizes consumer and legal campaigns.
    http://www.ucita.com

    Ed Foster's GripeLog weblog has a section devoted to consumer rights and EULAs:
    http://www.gripe2ed.com/scoop/section/Eula

    The Bureau of Consumer Protection, a division of the FTC that enforces consumer protection laws enacted by Congress:
    http://www.ftc.gov/ftc/consumer/home.html

    "PC Invaders," a 2002 article from C|Net on EULAs from a consumer rights perspective:
    http://news.com.com/2009-1023-885144.html

    "Software User's Rights" by DJ Bernstein:
    http://cr.yp.to/softwarelaw.html
    Last edited by WebDomain.com; 11-12-2006 at 06:28 PM.
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