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Most Online ‘Terms of Service’ Are Incomprehensible to Adults, Study Finds

Reading the terms and conditions of online consumer contracts requires, on average, more than 14 years of education.

by Dustin Patar
Feb 12 2019, 7:51pm

Research shows most online contracts are unreadable, even though they are still legally binding. Image: Shutterstock

Two law professors analyzed the sign-in terms and conditions of 500 popular US websites, including Google and Facebook, and found that more than 99 percent of them were “unreadable,” far exceeding the level most American adults read at, but are still enforced.

According to a new paper published on SSRN (Social Science Research Network), the average readability level of the agreements reviewed by the researchers was comparable to articles in academic journals.

“While consumers are legally expected or presumed to read their contracts, businesses are not required to write readable ones. This asymmetry—and its potential consequences—puzzled us,” wrote co-author Samuel Becher, a law professor at Victoria University of Wellington, in an email to Motherboard.

We’ve all been there, signing up for a new digital service such as Amazon or Uber and being asked to tick the box saying that we agree to the terms of service, or ToS. These agreements typically include clauses on intellectual property, prohibited use, and termination, among many others.

Most of us accept the terms without bothering to read the fine print. But with these relatively new types of contracts, known as sign-in-wrap agreements, there is a danger in clicking “agree” without reading or understanding them—they’re regularly enforced.

Take Fteja v. Facebook, a 2012 New York district court case, in which a Facebook user alleged that his account was closed because of his religion and ethnicity.

What the claimant didn’t know, because he didn’t read the contract, was that Facebook has a clause that states any claim against the company must be resolved in Santa Clara County, California.

Ultimately, the judge transferred the case, stating that “failure to read a contract before agreeing to its terms does not relieve a party of its obligations under the contract.”

Until now, the readability of sign-in-wrap agreements had never been formally analyzed.

Becher and Dr. Uri Benoliel, from the College of Law and Business in Ramat-Gan, Israel, selected 500 of the most popular US websites that featured these types of contracts and applied two widely accepted readability tests to their terms and conditions.

One is the Flesch-Kincaid (F-K) test, which uses a formula to estimate the grade level required to understand the text. The other, the Flesch Reading Ease (FRE) test, places the average sentence length and number of syllables into a formula to develop a score from 1 to 100.

Most studies on readability suggest consumer-facing texts should be written at no more than an eighth-grade reading level when using the F-K test, or have an FRE score of 60 or above.

According to Becher and Benoliel’s findings, only two of the contracts analyzed met that standard, with the other 498 having an FRE score below 60 and requiring an average of more than 14 years of education to understand.

Some companies have tried to make things easier for consumers.

Just 4.8 percent of the sites analyzed, including Tumblr, feature more accessible versions of their contact alongside the typical legalese. While this may alleviate readability issues and even inject some fun into otherwise monotonous documents, for Becher and Benoliel, it raises other concerns.

“What parts of the text are binding? In case of disputes, should the courts prefer one type of text over the other?” they ask in the study.

While there’s not one fix-all solution for sign-in-wrap readability issues, both F-K and FRE tests are already in use by some federal and state agencies to ensure documents such as tax forms and health benefit plans are readable.

Becher and Benoliel would like to see this become a general duty for all consumer contract drafters.

In the meantime, consumers shouldn’t automatically accept these contracts at face value.

“Too many people believe that if the contract says something then this is it and it is what it is,” said Becher. “Assertive, sophisticated, or vocal consumers can sometimes get firms to forego the contractual language and reveal a more pro-consumer approach.”

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