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The Truth Behind Hidden Contracts

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    NEWSLETTERS

    It’s almost become automatic: download, upgrade – whatever it is, the “terms of agreement” pop up and often times, we click “I agree” without thinking twice. But what, exactly, are we agreeing to? NBC 7’s Consumer Bob explores the topic of hidden contracts on July 16, 2014. (Published Wednesday, Jul 16, 2014)

    It’s a contract few people read but nearly everyone has agreed to: the contract that often accompanies websites, service upgrades and downloads.

    It’s that “Terms of Agreement” that often appears on your phone, tablet or computer screen before you are allowed to progress on the site. The terms are often long, legal and rarely read, yet California Western School of Law professor Nancy Kim said those terms are as binding as a traditional contract.

    “If you ever end up in court they will treat that electronic agreement the same as they would a paper contract that you sign with a pen,” Kim explained.

    So what you don’t read could hurt you.

    Kim said more and more contracts are adding provisions that take away free speech.

    “We’re getting our privacy rights diminished,” she added.

    Kim said some online contracts block consumers from taking the company to court or participating in class action proceedings, instead requiring binding arbitration. Some sites add a non-disparagement clause that says consumers can’t complain about the company on social media. Some detail expensive return policies, cause consumers to give up rights to online photographs and other hidden agreements.

    “People don’t think they are entering a contract when they click accept,” said Kim.

    Still, some consumers say they simply don’t have the time or patience to read the contracts, including San Diegans Allen Langdale and Bryan Flores.

    “It’s legal stuff that just goes on and on and on,” said Flores. “You get bored about two, three lines into it so you just skip it.”

    Kim said some consumer watchdog groups are paying attention but the law hasn’t caught up with the technology.

    She is afraid that companies will start adding more and more restrictive clauses in their “Terms of Agreement” knowing that consumers not only don’t understand the contract but don’t even read it.

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