Last month Yale Law School's LawMeme site had a rather fascinating discussion about what it thought might be the worst terms-of-service agreement ever. And certainly a good case can be made that the "agreement" - for an online museum of historic railroad photographs - is just that. With more than 20,000 words of tortured, self-parodying legalese, including a few nasties like a $5 million liquidated damages clause, it's certainly one of the worst I've seen.

But maybe not the worst. Over eight years ago a reader first called my attention to the license agreement for "The Breeder's Standard," a software package for dog kennel owners and breeders from Man's Best Friend Software, Inc. (MBFS) of Antioch, IL. Although considerably more concise and professional in its language than the railroad museum terms, MBFS's software license agreement had quite an array of liquidated damage clauses of its own, including $1.5 million for any violations of broadly-worded non-compete clauses. My favorite part though was the $5,000 liquidated damages one agreed to pay for any credit card chargeback (i.e., a charge that's reversed after the cardholder disputes it) made against the company for whatever reason.

The LawMeme story got me to wondering if MBFS and its over-reaching EULA were still around. Sure enough, the company itself seems to be going strong, and I've been able to confirm the EULAs that appear in its recent manuals are very much the same. Violations of the non-compete language will now cost you a mere $500,000, but the chargeback charge has inflated to $8,000. And you still "expressly confess, in the event of such a 'chargeback', that such chargeback constitutes fraud and confess such fraud." Chargebacks are a pain for merchants, but they are also the first line of defense for consumers against undelivered goods, duplicate charges and merchant fraud. So there's a Catch-22 quality in the MBFS license agreement that you almost have to admire for its audacity.

But MBFS's lawyers haven't just been coasting for these last eight years. What I find even more interesting than the software EULA is MBFS's website user agreement. In particular, it adds yet another set of offenses for which you owe liquidated damages:

"By using the Site, you agree, for a period of one year from the date and time you last use the Site, not to publish any private or public derogatory comment about MBFS, its products, service, or employees (past or present). By 'publish' you agree we mean any private or public communication, regardless of method, between you (or someone acting at your direction or for your benefit) and one or more other people. In the event you violate this provision, you agree that it is impossible to determine the damage that MBFS will have suffered. Therefore, in lieu of a trial or hearing on damages, you agree to pay MBFS the sum of US$10,000 per publication as liquidated damages and not as a penalty."

In other words, anyone who visits the MBFS website for any reason whatsoever has supposedly entered a solemn contract not to say anything bad about the company for a year. I wouldn't treat a dog like that, much less a prospective customer. Oops, is that a derogatory comment about MBFS? Actually, though, we don't have to put too fine a point on what MBFS might or might not consider derogatory. Just in discussing the contents of an MBFS web page with any third party that include "previous, current or prospective customers" of the company, I've violated another provision of the user agreement that carries a $5,000 non-penalty.

OK, the possibility of MBFS getting a court to enforce any of these terms against me or anyone else is quite remote. Even with the DMCA as part of it, copyright law is pretty clear on fair use rights like quoting excerpts of text for public commentary and criticism. And this thing called the Constitution mentions something about a free press and free speech.

But let's not kid ourselves either. These outlandish user agreements might seem like a bad joke, but they reflect ideas about contract formation and intellectual property that have been gaining ground in our legislatures and our courtrooms. In that respect, the worst sneakwrap agreement of all might be the next one you don't read.

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