App developers - don't sweat the small [print]
Tuesday, August 23, 2011 at 3:45PM If you develop mobile applications for iOS, Android, Blackberry and the like then how do you deal with end user licence agreements for those apps?
Along with anyone else with a product to ship, app developers tend to focus on getting the product right rather than on lawyering-up to fine tune their terms and conditions.
Totally understandable, but shouldn't you really have some kind of licence agreement in place with the end users?
The App Store factor
If you submit your app for the iPhone or other iOS device to the Apple App Store then Apple (sort of) have your back on this one.
This is a bit unusual. After all, if you don't sort out terms and conditions for your website or an end user licence agreement for your software then nobody else is going to do it for you.
iOS apps have to be downloaded from the Apple App Store though. This means the end user has signed up to a whole raft of terms and conditions imposed by Apple in order to access the App Store before they can download and install your app.
As you would expect, most of these are there to protect Apple's intellectual property and that of their licensing partners.
What is less obvious is that when users accept Apple's terms they also sign up to the snappily-named Licensed Application End User Licence Agreement, which can be found on the App Store section of Apple's UK iTunes terms and conditions page.
This is actually a form of end user licence agreement (I'm just going to call it the EULA from now on) for your iOS app. Apple kindly puts this in place as a contract between you (as the app publisher) and the end user if you don't impose your own form of EULA.[1]
So the standard EULA will cover me?
The standard EULA may be enough to cover you against legal risk. Or it may not. It really depends on what your app does.
Most apps will end up being covered by the standard EULA though so it is worth taking a look at what it covers. After all, developers aren't going to pay for a bespoke EULA unless there is a very good reason to do so (any maybe not even then!).
The standard EULA cover a lot of the areas which should be picked up in any well drafted terms:-
Defining the scope of the licence to be granted to the user of the copyright and other intellecual property comprised in the app
Consent to using technical data gathered about the user's device
Exclusion of liability for third party materials and websites
Exclusion of warranties
Limitation of liability
What doesn't it cover?
There are some areas which the standard EULA doesn't cover.
Whether these matter will depend on what your app does and how it works.
If any of these are relevant to you then it may mean you need to think about putting a bespoke EULA in place.
Payment Terms
I presume this ommission is mainly because payment for the app and any in-app purchases are governed by Apple's standard terms.
If your app has some additional e-commerce element (the Ocado on the Go app is an example of one I use from time to time) then you will deal with payments, refunds etc. somehow.
You also need to think about your obligations under the Distance Selling Regulations... but that is one for another post.
Whether you cover these issues in the EULA for the app or in additional terms which the user accepts when they place an order will depend on how your app works in practice.
The main thing is to make sure you do cover it somehow as Apple haven't done it for you.
User Generated Content
The standard EULA doesn't really cover issues around user generated content (UGC) which users create or input using the app.
Again, whether this matters will depend on what your app actually does.
If it allows content to be shared beyond the user's own device then it will usually require an account to be set up with your underlying web-based service (which hopefully requires the user to sign up to terms and conditions of use?).
If it uses an API to access a third party service (like Twitter) then any UGC is likely to be covered by the terms and conditions which apply to that service.
If neither of these apply then you will need some bespoke terms and conditions which say who owns and is responsible for this UGC and what the publisher can do with it.[2]
Limitations on Liability
The limitations on liability in the standard EULA may not be tight enough if your app is high risk in some way.
They exclude liability for claims where there is "no breach of duty of care" or where the loss claimed is not "a reasonably foreseeable result of... [the] breach" (i.e. situations where there is unlikely to be a claim in any event).
There is also an exclusion of claims relating to "loss of income, business or profits".
However, there isn't a financial limit on liability.
If your app is a game or provides general information then this may not be an issue, but (to use a legal example) if your app drafts wills or employment contracts for users then you might prefer to place a financial limit on your liability.[3]
Just as a further complication for any solicitors thinking of producing an app which provides legal services... Rule 2.07 of the Solicitors Code of Conduct requires any limitation of liability to be specifically brought to the attention of your client. I doubt whether simply relying on its inclusion in Apple's standard EULA will be sufficient.
Warranties for Third Party content
My personal view is that there is an inconsistency in the standard EULA in relation to External Services (defined as "third-party services and websites") which may be provided or accessed via an app.
Section (d) of the EULA contains the usual exclusions and disclaimers of any responsibility or warranty for these third party services.
However, section (e) contains a warranty that the Licensor will use reasonable skill and care in providing the app itself and also:-
any External Services performed or provided by... [it]
It's not really clear, to me at least, what this wording in section (e) is meant to cover, or how this conflict between the sections would be resolved by a Court.
For any services which you provide via the app this level of warranty will be implied anyway by Section 13 of theSupply of Goods and Services Act 1982, but if your app relies heavily on External Services it might be worth considering a bespoke EULA which doesn't include this wording in respect of any External Services.
Finally, think carefully about any third party content. I have seen proposals for apps which repackage content from third parties' RSS feeds in the mistaken assumption that these are somehow in the public domain.
If they are from a commercial source then the feed may well not be licensed for you to publish as part of a paid-for service... and this could end up being an expensive mistake.[4]
What if you use a bespoke EULA?
Obviously you should obtain legal advice on its terms (of course I would say that!), but there are a couple of general points to watch out for.
All or nothing
The wording of the Apple EULA states that it will apply
unless... a valid end user licence agreement [is] entered into...
This appears to mean if you use a bespoke EULA then the standard one will not apply at all.
This means you need to make sure your bespoke wording covers any relevant provisions from the standard EULA.
In particular, section (b) (Consent to Use of Data) of the standard EULA will need to be included in some form as otherwise the user will not have given consent for you to use technical information which you may gather about their device, system etc.
The same will apply to the licensing and limitation provisions. You will need to make sure these are covered in your bespoke EULA as you won't be able to rely on the standard provisions.
Incorporation
The normal laws of contract will apply to whatever EULA you try to impose on your users.
From a practical point of view this means thinking about how, and when, the contract which is constituted by the EULA is formed.
If users pay to download your app, are they going to be confronted with a set of terms and conditions which they have to accept when it is launched?
If so, it may be too late for these to be validly incorporated into your contract with them (see for example the case of Olley v Malborough Court Hotel).
It's difficult to know exactly how to avoid this risk, but a prominent statement in the app store description that purchase of the app is subject to acceptance of terms and conditions (with a link to where these can be found) would be a sensible precaution.
Common Sense
Finally, at the other extreme it is also possible to go over the top with your terms and conditions.
The best example I have seen of this is from a law firm (perhaps no surprise!).
Their iPad app requires you to accept seven and a half iPad screens of small print terms, conditions and disclaimers in order to access the app.
What super-sensitive and risky information does it contain? General information about their offices, lawyers and practice areas which you could also find on their website.
I'm all for terms and conditions where appropriate, but you need to make sure they are proportionate to the risk you are trying to address!
Terms and Conditions may apply
This post came about as a result of my having been asked about these kinds of issues recently by app developers.
It isn't meant to constitute legal advice, but hopefully it will help to point you in the right direction as to whether or not you need it.
I'm happy to answer any general questions via the comments, but I can't give legal advice on any specific issues. If you would like a legal risk audit of a specific app and a price for drafting an EULA then it's best to get in touch using the email contact form.
[1] As matter of contract law the analysis of how this works would get pretty technical (and this post is already long enough), but let's just accept for now that by downloading the app a binding EULA is entered into between you as the publisher and the end user of the app.
[2] Bear in mind that this isn't just a landgrab (as Twitpic and others have found out).
[3] The provisions of the provisions of the Unfair Contract Terms Act 1977 and the Unfair Terms in Consumer Contracts Regulations 1999 will apply to any limitation or exclusion of liability. This is beyond the scope of this post, but broadly there are some areas where you can't exclude liability at all (e.g. negligently caused personal injury) and other areas where any limitation must be "reasonable").
[4] See for example the FT.com terms of use which cover use of their RSS feeds amongst other things.
