Legal Question in Technology Law in California

Is a click-through EULA generalization binding?

In an EULA for a paid product (computer game), how enforceable is the line:

''[We] may suspend, terminate, modify, or delete the account at any time with any reason or no reason, with or without notice.''

The primary concern is the ''no reason'' cause for terminating an account. Is it legal for a company to close accounts with no cause?


Asked on 12/15/06, 11:53 am

1 Answer from Attorneys

Bryan Whipple Bryan R. R. Whipple, Attorney at Law

Re: Is a click-through EULA generalization binding?

Yes.

The essence of a contract is that it is a voluntary arrangement between parties. There are a few limits on what is called the "power to contract;" for example, a residential lease cannot contain a clause exculpating the landlord for his own negligence. This is because "public policy" finds such clauses repugnant.

However, I do not know of any jurisdiction that frowns on private agreements specifying that they are terminable at will. In fact, "at will" contracts are fairly commonplace in the business world. Think how many contractual arrangements you are involved in where you feel free to cancel or stop using the service whenever you want! As just one example, you can terminate your residential telephone service anytime.

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Answered on 12/15/06, 3:15 pm


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