EULA

EULAs – are standard form licensing agreements issued by a software provider to the end user (e.g., from a game producer to a game player). EULAs typically comprise a comprehensive set of rules which determine how the software can lawfully be used. These rules include, but are not limited to, regulations on potentially harmful behaviours (e.g., prohibition of hacking or trolling) and restrictions on the use of a game copy (e.g., prohibitions against copying a game or re-sale).

Historically, EULAs were offered in ‘shrink-wrap’ form, within the sealed (‘shrink’) packaging of physical games. In the digital era (and particularly post-2010 when influential game companies stopped using paper documentation),[1] EULAs are usually offered in ‘click-wrap’ form upon installation of the game, where the user is prompted to agree with the terms via a pop-up dialogue box upon installation or first access. Where games are exclusively offered in an online format, game producers may use ‘browse-wrap’ formats of EULAs, which are typically embedded in a hyperlink on the official game website.

Figure 1: Screenshot from Nintendo Switch showing clickwrap EULA

Whilst EULAs are the primary legal contract which governs the conditions of access to a game, they are increasingly supplemented through a complementary and interrelated user-side contracts, including terms of service, [user generated content] policies and privacy policies. Usually, the EULA and any accompanying documentation must be accepted in order to access and play the game (and if they are rejected, access to the game will be terminated).

EULAs have been critiqued both for their poor readability, being excessively long and full of complex, legal jargon, and their tendency towards broad, all-encompassing legal claims and obligations on the user. This has led some commentators to argue that the statement ‘I have read the terms and conditions’ as being the ‘biggest lie on the internet.’[2] Several parody EULAs and bogus clauses have also drawn attention to this issue.[3] In response to this, recent crowdsourced efforts have made user-friendly interpretations of popular EULAs to improve navigability, including ToS;DR[4] and Clickwrapped.[5]

In many cases, users of game software will also be consumers, thus falling into the scope of consumer protection laws (see e.g., the Unfair Terms in Consumer Contracts Regulations in the EU or Uniform Commercial Code in the US). These laws may be triggered where EULAs transfer inappropriate risks to consumers through limitations on product liability, warranties, or indemnities, or where the EULA otherwise attempts to exclude or restrict a consumer’s statutory rights or remedies (e.g., to be refunded for a faulty game product).

As EULAs are fundamentally contracts, they are subject to general rules on contract formation and enforcement. This has been a particularly contentious legal issue as EULAs are usually only available post-purchase (upon installation of a game), on a non-negotiable basis, and are subject to ongoing unilateral changes by the game producer.

Legal opinions on the enforceability of EULAs vary across jurisdictions and are determined on a case-by-case basis leading to unpredictable results. In the US, EULAs have been characterised as contracts of adhesion or otherwise unconscionable (unenforceable),[6] but likewise have been determined to be valid and enforceable under different conditions.[7]

Games are usually protected as a form of intellectual property, predominantly copyright in the underlying code and audio-visual components of a game, but also potentially including patents and trade marks. EULAs both give permission to the user to use the game producer’s intellectual property,[8] whilst also modifying default legal rules on the user’s ability to reproduce, distribute or adapt a game. This legal issue has been particularly prevalent with terms which prevent the re-sale of game software, which is likely to be upheld in both the US[9] and EU.[10]

EULAs may also attempt to restrict excepted (lawful) user actions, including the right for users to make personal or back-up copies of games, or to reverse engineer games for the purposes of understanding how they work. The extent to which these exceptions can be superseded by the terms of the EULA varies from jurisdictions and the type of exception in question. For example, the right to reverse engineer in spite of EULA terms to the contrary has been upheld in the EU[11] but has had mixed results under the US ‘fair use’ system.[12]

EULAs may have implications for other areas of law, including (but not limited to): data protection law in respect of conditions on the use of player information, and; laws on freedom of expression in respect of conditions prohibiting criticism of the game product.