Occasionally I offer up an inquiry from a reader and step aside. This is one of those occasions.
Blake Reagan is a lawyer who works as a contract administrator for The University of Tennessee. I got to meet him at my recent “Drafting Clearer Contracts” seminar in Los Angeles. He’s a thoughtful and no-nonsense guy, so I paid attention when he sent me the following:
One issue that I regularly encounter with software contracts is that the licensor will have a written license and the license contains an entire-agreement clause. The vast majority of software products contain click-wrap or browse-wrap terms. It’s rare for the written license to refer to the click-wrap or browse-wrap terms.
I can’t discuss the details because it involves confidential settlements and also pending litigation, but it’s apparent to me that software vendors believe that both their written license and their click-wrap or browse-wrap licenses apply, despite the written license’s entire-agreement clause. There have been some consequences as a result of the university’s failure to address the applicability of the click-wrap or browse-wrap terms.
The written license and the click-wrap or browse-wrap almost always conflict. This issue is particularly troublesome for government entities. I work for a public university, and we negotiate the written license. The click-wrap, browse-wrap, or shrink-wrap terms almost always contain governing law, indemnity, arbitration, etc., which are universally problematic for government entities, and also conflict with the written license we negotiate. Due to the consequences the university has faced, I would like to add some language to the entire-agreement clause that specifically excludes click-wrap, browse-wrap, and shrink-wrap terms.
I’d love to hear your thoughts on this issue.
Before I attempt to create the kind of language Blake is seeking, I thought I’d see what you all have to say.
Many Universities have a “No EULA” provision in the negotiated written license, along the lines of:
In the event that VENDOR enters into terms of use agreements or other agreements or understandings, whether electronic, clickthrough,verbal or in writing, with College employees, students, or other end users, such agreements shall be null, void and without effect, and the terms of this Agreement shall apply.
That approach with respect to binding the university, but that’s not the whole problem.
I’ve added terms (for a licensor) that the university would not object to specific terms that would be added to a EULA, because the license agreement with the university can’t bind individual users.
It’s a bit tricky. An entire-agreement clause usually prohibits varying the terms of the agreement by prior or contemporaneous agreements (thus merely tracking the parol evidence rule), but here you want to exclude “agreements” that might occur afterwards as well. In a way, it’s like the common clause that excludes form terms on purchase orders, acknowledgments, and so forth.
Here’s a rough and ready attempt to capture this concept:
This agreement (including any appurtenant exhibits, schedules and other documents incorporated into it) constitutes the sole agreement between the parties with respect to [here one often says “its subject matter,” though MSCD prefers to get granular, in which case you could say “the licensing of Software (assuming that has been defined) by Licensor to Licensee and the activities of the parties incidental to that licensing. This agreement supersedes any prior or contemporaneous written or oral agreements or communications between the parties. It may not be modified except in a writing signed by both parties. No “click-through,” “shrink-wrap,” “browse-wrap” or similar terms that have not been specifically negotiated by the parties, whether before, on, or after the date of this agreement, will be effective to add to or modify the terms of this agreement, regardless of any party’s “acceptance” of those terms by electronic means.
Most users of our contract review software are lawyers, and some raised issues with the interaction between our written license and EULA (like Blake describes). To avoid user objections, we modified the entire agreement clause of our standard written license to read:
“This Agreement sets forth the entire agreement of the parties as to its subject matter and supersedes all prior agreements, negotiations, representations, and promises between them with respect to its
subject matter. This Agreement also supersedes, for all User personnel who use the Service, the default click-through DiligenceEngine user agreement.”
Looks as if Ken never did weigh in. Here’s my attempt, aiming for concision:
This agreement sets forth all the terms to which the parties are binding themselves as to its subject matter. This agreement supersedes all prior, simultaneous, and later communications of the parties as to its subject matter, except formal amendments, which are amendments in writing, signed by all the parties. Formal amendments exclude browse-wraps, click-throughs, click-wraps, shrink-wraps, and other similar and dissimilar terms nominally subject to electronic acceptance by users.
Off-topic comment: I’m troubled by the phrasing, ‘This agreement is the entire agreement of the parties’. It seems to me to use, without comment, two senses of the word ‘agreement’ in close proximity, namely, the material instrument and the immaterial meeting of the minds the instrument embodies. What danger that poses, I’m not sure, but it seems better to use different words for different things, hence my suggested phrasing, ‘this agreement sets forth all the terms to which the parties are binding themselves’.