Risk Management Reports

June, 2000
Volume 27, No. 6
eRisky Contracts?

When you logged onto that website and a "User Agreement" popped up, did you read it carefully or did you just click the "I accept" box and move on to what you wanted? Most of us simply assume that any so-called "agreement" is normal and non-threatening and proceed accordingly. Watch out! In January I recommended the new eRisks.com website of Enterprise Risk Solutions. One of my readers, Chris Lajtha, the risk manager of Schlumberger, in Paris, being a cautious reviewer of all manner of contracts, actually took the time to read the eRisks.com User Agreement and Important Legal Notice.

"I am not a militant by nature," he reported to me, but he was concerned about many of the Agreement's requirements:

  • "eRisks has the option to modify the terms and conditions at any time, so that every log-in requires a re-reading and re-acceptance of any amended clauses."
  • "The restrictions on use appear to be draconian: none of the information that is published can be downloaded onto any kind of information database or published on any intranet or distributed to any other person within my company."
  • "How can material published into the public, or quasi-public domain, be deemed 'trade secrets?' This is nonsense."
  • "Apparently some form of limited license downloading is permitted as long as only personal use (editor's italics) is made of the materials. What defines personal use?"
  • "I reject the personal and sole liability assumption for actions of others, even if in connection with my sue of the service."
  • "I also reject the idea of funding eRisk's defense costs."

Going back to the agreement at issue, I agree with Chris: three pages of small type and dense prose prepared by legal counsel run amok! Chris also made the point that, since this agreement is so coercive, it might not hold up in a court of law, in either Europe or North America.

This led me back to eRisks and Jason Kofman, who advised me that the entire agreement is now under review by internal and external legal counsel. He commented that eRisks originally had planned to charge for this service on a subscription basis but had changed its mind in January. Some of the legal jargon was based on it being a paid service. Its mission is now to provide leading-edge risk management information on a free basis, operating as advertising for eRisks and its consulting services. Apparently some 7,600 users have enrolled to date, so there is real interest in the information. He agreed that a shorter, less confusing, and more "user-friendly" agreement would better serve all parties.

I look forward to the revised version, as this is a common problem on the Internet. I sympathize with eRisks. It is posting valuable information on its website whose use it wants to try and control. The problem is the use of old systems to control new technology. We must revise our thinking on the use, attribution, and dissemination of electronic information in this new age. Where does copyright begin and end? What is plagiarism? What is proprietary information? Once information and data reach electronic space, the rules change, as much as we hope that past dictates survive. I faced this with Risk Management Reports several years ago. Recognizing that readers will inevitably make copies (print or electronic), whether I like it or not, and that attempting to curtail such activity is Quixotic, I amended the normal usage statement to permit copies so long as full and proper attribution is given. Realism trumps archaic legal standards.

Copyright H. Felix Kloman and Seawrack Press, Inc.

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