Understanding Michigan Contract Law and Online User Agreements

Online user agreements are everywhere nowadays, whether you realize it or not. “Agreeing” to an app’s terms of service is just one example of online user agreements consumers must first sign. But in the name of convenience and because so many users don’t even read what they’re signing, contract law is quickly becoming a very complicated landscape.

When you sign these online user agreements, you enter into what is known as an adhesion contract. These contracts often create unequal bargaining power between the two contracting parties. Unfortunately, if users don’t agree to the terms, they are unable to use the service. These services include email, audio and visual streaming, and mobile device applications, to name a few.

Bryan Waldman, who practices Michigan personal injury law, appeared recently on WLNS 6 “Legal Edge” so explain the ins and outs of these required agreements.

Michigan Contract Law Differs from Most Other States

In nearly every other state, courts analyze these adhesion contracts for any unreasonable terms, when escalated in a lawsuit. The court can then invalidate any terms which are considered unreasonable. This isn’t the case in Michigan. In 2003, the Michigan Supreme Court ruled that adhesion contracts should be handled just like any other contract. This means that they should not be reviewed further for any unreasonable terms and that users who sign these contracts are bound by the terms within it.

WLNS Legal Edge – Online User Agreements and Privacy Laws

Enforcing  Online User Agreements

Under Michigan contract law, the only instances adhesion contracts are considered unenforceable is when there is fraud, the user signs under duress, or the terms of the contract are considered unconscionable, which is more than unreasonable. Further, using the excuse of not reading the contract is never a defense that will hold up in court. The bottom line here is: Michigan has pretty tough contract law standards so please read the contract and understand it before signing anything.