The Problem with Pinterest is the Terms of Service

OK, before I get anymore troll action from Pinterest fan-girls who are upset that somebody isn’t impressed by the business model of their favourite new web-tinsel frivolity… let’s all just pull our heads in and look at this as grown-ups. It’s not about your jollies or the things you do with your web-besties when porn loses its lustre – this is about the law.

When you join and upload content to Pinterest you are legally entering an agreement that affects you (as an adult in the real world) and at least in that regard it should be hitting your radar. Because, love their service or not… the idiot that will be sitting in a courtroom is more likely you than representatives of Pinterest. It’s in their TOS… that TOS that pretty much throws you to the wolves.

Kalliopi Monoyios posted an article this week titled Pinterest’s Terms of Service, Word by Terrifying Word pointing out the magic words within their TOS that should get your adult brain firing. One paragraph from the Pinterest TOS reads:

By making available any Member Content through the Site, Application or Services, you hereby grant to Cold Brew Labs a worldwide, irrevocable, perpetual, non-exclusive, transferable, royalty-free license, with the right to sublicense, to use, copy, adapt, modify, distribute, license, sell, transfer, publicly display, publicly perform, transmit, stream, broadcast, access, view, and otherwise exploit such Member Content only on, through or by means of the Site, Application or Services.

Kalliopi points out the bits you need to be concerned about… “worldwide, irrevocable, perpetual, non-exclusive, transferable, royalty-free license, with the right to sublicense… yada yada. Yes, pretty much all of it.

In simple terms you hand over the content you uploaded to your Pinterest account… it goes to Cold Brew Labs forever and you can’t change your mind and they can on-sell, repurpose or do whatever the hell they want to squeeze a quid of profit from it anytime they consider it worthwhile. You have given away your stuff.

Pinterest’s Aggressive Opt-Out not Opt-In Feature

Oh yeah, it most likely wasn’t your stuff. Hey, it could even be my stuff or the stuff from somewhere bold enough to sue your sorry butt. It could belong to an aggressive company that protects its intangible business assets, like Getty Images. Or Associated Press. These are organisations that can and will pursue you to protect their profit margins.

Kalliopi hits it on the head when he points out that the real problem is Pinterest’s TOS “don’t mirror the intentions of users”.

Yes, Pinterest provides a snippet of code that will tell people (like they’ll listen) that you don’t want to share your online images in their service. However, as a web developer who just had to put that snippet onto my clients’ websites I don’t think it’s a good direction to head where one business model requires every website on the Internet to opt out of their environment. Here’s a better idea… ask us if we want to opt into the Pinterest service… let those websites willing to play in the little sandpit of their business model to put a piece of code into every clients website.

And you are the Sole Owner of all Member Content

Glendon Mellow brings out the most salient point in my concern about the Pinterest TOS… ownership. It reads that you:

“…are the sole and exclusive owner of all Member Content…”

and you,

“agree not to do any of the following: Post, upload, publish, submit, provide access to or transmit any Content that: (i) infringes, misappropriates or violates a third party’s patent, copyright, trademark, trade secret, moral rights or other intellectual property rights…”

That means the only person who will get into major legal shit is YOU, the customer. Why? Because when you upload your Pinterest content for sharing you are claiming you own the intellectual property rights of that content and you are passing total control over to Cold Brew Labs to do with that content whatever they wish. That means eventually somebody like Getty Images… or even me… will come back to haunt you.

Any content creator, commercial or non-commercial, needs to be concerned about this type of business activity affecting their work and legal environment.

My point to Pinterest users is that they stand a very good chance of losing a court case if they give away the wrong person / company’s intellectual property to Cold Brew Labs. Depending on the country that intellectual property crime occurs in, they could be pursued with extreme prejudice. Pinterest got them to agree to that from the beginning.

Don’t Say you weren’t Told about the TOS

No, I’m not against social web applications and all the better if they make some money. But I am against business models that are purposefully worded to capitalise on property theft while getting their users to foot the legal payload.

And I am against the idea that every website has to place explicit code asking to opt-out of the Pinterest service. What if twenty or a hundred web services adopted that arrogant attitude? Would we have massive web page headers loaded down with a thousand explicit meta tags to opt-out of each and every one? Features like that need to be opt-in or not at all.

And on that point alone the web industry bodies should be up in arms at the management team at Pinterest.

A bad exploitative business model is just that. As long as Pinterest keep that wording in the TOS there will be an issue to answer. So go play on Pinterest until your bum falls asleep on your office chair for all I care, but don’t dare suggest (on Twitter or elsewhere) that this is an ethical manner of doing business. It isn’t. That TOS really isn’t.

Here’s a passing tip: Don’t sign dumb legal contracts on the Internet and expect that life will treat you fairly. The old saying, now almost a cliche, applies… “if you’re not paying for the product then you are the product.” Pinterest is no different.

The Limitations on Australian Companies

However, in the modern world everybody should be aware that companies do have limitations on the claims they can make and the manner of selling they undertake to snag new customers. In the modern world it’s not enough to be greedy in business… even if you’re successful. You are going to be held to account for your marketing integrity.

The limitations for an Australian company are spelled out in the Competition and Consumer Act 2010. Prior to 1 January, 2011 this piece of legislation was more widely known as the Trade Practices Act 1974.

Any Australian company should understand what constitutes misleading and deceptive conduct under this legislation. And they should realise that:

No matter how a business communicates with you—whether it is through packaging, advertising, logos, endorsements or sales pitch—you have the right to receive accurate and truthful messages about the goods and services that you buy.ACCC

Legislation that Protects Consumers

When defining what constitutes misleading and deceptive conduct in business the ACCC provides these statements:

There is a very broad provision in the Australian Consumer Law that prohibits conduct by a corporation that is misleading or deceptive, or would be likely to mislead or deceive you.

It makes no difference whether the business intended to mislead or deceive you—it is how the conduct of the business affected your thoughts and beliefs that matters.

If the overall impression left by an advertisement, promotion, quotation, statement or other representation made by a business creates a misleading impression in your mind—such as to the price, value or the quality of any goods and services—then the conduct is likely to breach the law.ACCC

That means if you are selling goods or services as an Australian company you had better provide a realistic idea of what they can expect from the product. Wild sales pitches that cannot be guaranteed should not be guaranteed, for example. And I don’t see that as a hard call to make – you don’t mislead people about the benefits of something just to get access to their bank account.

Australian Consumer Law

It is well worth your while – business people and consumers alike – to check out the new ACL (Australian Consumer Law) website. A general description of the new Australian Consumer Law includes:

• a new, national unfair contract terms law covering standard form contracts;
• a new, national law guaranteeing consumer rights when buying goods and services, which replaces existing laws on conditions and warranties;
• a new, national product safety law and enforcement system;
• a new, national law for unsolicited consumer agreements, which replaces existing State and Territory laws on door-to-door sales and other direct marketing;
• simple national rules for lay-by agreements; and
• new penalties, enforcement powers and consumer redress options, which currently apply nationally.ACL

The ACL applies to all Australian businesses and all transactions since 1 January, 2010.

If you are a consumer and you feel that any business has been misleading or deceptive then I would recommend that you should make a complaint to the ACCC.

Lodging a Complaint against a Seller or Proprietor

The process is to contact the seller or proprietor to attempt negotiation of the issue and if that fails then notify them of your complaint and your intention to take it further with the ACCC. If you have no response from the seller or proprieter after 10 days to 2 weeks then write a letter to the ACCC to lodge your complaint. You may want to also talk to a lawyer.

The problem is really as simple as this: we get the business environment that we deserve. If we don’t demand honest businesses then we won’t get them. Yes I do understand that entrepreneur’s feel that selling is just the ticket to get your dollar… but that’s so old school. We expect more from entrepreneurs and businesses nowdays.

The ACCC website also have this to say… and Australian businesses should pay attention:

We are more likely to take action against a business for misleading advertising if it has been carried out through a medium that reaches a wide audience, such as over the internet, on national television, or through a nation-wide print advertising campaign.ACCC

Just be Honest & let the ACCC know your concern

The Internet, for example, is NOT the Wild West. And even if you complain and nothing happens… others may be having the same issue with the same business. Eventually the ACCC will see a pattern and may decide to act to protect Australian consumers.

Just be honest about what happened, provide all the documentation that you can, and about what you can and cannot prove. Obviously smart operators will keep the incriminating stuff verbally on the telephone and watch their words within the email trail.

And don’t let anybody bully you out of complaining… by threatening you with a legal action. It is your legal right as an Australian consumer to complain to the ACCC if you have concerns.

The Myth of Writing your own Contracts

One of the stupidest things anybody could do in business is try to shortcut their way through the legal landscape. Just like accountants will save you more money than they cost… so will hiring a decent lawyer.

For a lot of people this is real news: a contract isn’t just anything you cobble together and get some fool to sign. There is a structure, like a dance, that determines when and where any contract was made, the parts that are valid and the aspects the courts will or won’t enforce. But I’ve received my fair share of these self-authored car wrecks to know it’s a real problem. People do want to cut corners in the short-term.

The real and present danger is that small businesses generally have no idea about contract law… and I’m hoping they might glean one thing from reading through this series of 15 posts (starting with Contracts 101 – Part 1: Outline). That one thing is this:

Sometimes you just need to know when to hire a lawyer. Appreciate what you don’t know.

Installments in Contracts 101

• Contracts 101 – Part 1: Outline
• Contracts 101 – Part 2: Which Contract?
• Contracts 101 – Part 3: The Six Elements
• Contracts 101 – Part 4: The Agreement
• Contracts 101 – Part 5: The Offer
• Contracts 101 – Part 6: The Acceptance
• Contracts 101 – Part 7: Battle of the Forms
• Contracts 101 – Part 8: Consideration
• Contracts 101 – Part 9: Capacity
• Contracts 101 – Part 10: Legality of Object
• Contracts 101 – Part 11: Possibility of Performance
• Contracts 101 – Part 12: Genuine Consent
• Contracts 101 – Part 13: Promissory Estoppel
• Contracts 101 – Part 14: Ending the Contract
• Contracts 101 – Conclusion: Protect your Business

Resources for this Series

The bulk of this information is obtained through Australian Business Law 26^th edition by Paul Lattimer, Managers and the Law: A guide for Business Decision Makers by Lynden Griggs, Eugene Clark and Ian Iredale, A Guide to Business Law thirteenth edition by John Carvan, John Gooley and Evelyn McRae, Law in Commerce third edition by Brendan Sweeney and Jennifer O’Reillly, as well as through the MBA unit BFA682 Law for Managers taught at the University of Tasmania by Simone Watson in 2009. These resources are highly recommended for improving your understanding about these issues. Many case files hyperlinked within this series are directly accessed via the Austlii database (Australia) and the BAILLI database (United Kingdom).

Genghis Khan got it. Admittedly, an estimated 40 million people died in his expansion to rule 22 per cent of the the world’s total land area… but he got it. If you ceded to the Khan and joined the Mongol Empire there was true multicultural citizenship under that rule of law. It was a very progressive idea at the time. Genghis Khan got it. He got that without ‘one rule of law for all men’ there is no law, only a pseudo-arbitrary system of checks and balances determined by connections, power and corruption.

We like to believe these are more law-conscious times than the rule of an infamous barbarian from the Asian Steppes. But when you look around at the written and broadcast news we’re bombarded with a constant sideshow of systemic corruption. If you watch any American thriller you would almost be convinced that corruption is not only expected in politics and policing but that it’s a desirable trait of the powerful. That the ends justify the means. And along that chain of thought it’s not too hard to see how renditioning and the Guantanamo Bay prison factor into our idea of Law.

Corruption is most often overt rather than covert and usually manifests in ways people have come to think of as ‘normal business’. So here is a litmus test of how to identify corruption. The ‘Green Light’.

Because any time you see ‘green lights’ thrown out in a society… where ‘one rule of law for all men’ is ceded… there is corruption. It’s not merely a flag that corruption exits; a ‘green light’ is corruption in it’s everyday most basic form.

The ‘green light’ that Neddy Smith apparently received from Senior Sergeant Roger Rogerson in the 1970s to rob banks, deal drugs and commit murder was corruption. The ‘green light’ that a government gives to a developer to fast-track past due environmental processing is corruption. The ‘green light’ to persecute any individual (no matter what the reason or the provocation) is corruption.

Lawyers are in a special ethical situation worth mentioning. The first school of ethical thought is that a lawyer’s role is to defend their client (innocent or guilty) to the best of their ability and to test their client’s case against the Law. This may mean an occasional guilty person walks free but in the long-term the Law is made more robust. The second school of ethical thought is that a lawyer is also a citizen and every citizen has an ethical responsibility to report crime and to ensure that guilty people are removed from society.

Unfortunately this second school of ethical thought is what has permeated the Tasmanian legal system for generations… and I recently had a conversation with a lawyer who saw no problem with that stance. Except, I should point out, that if arbitrary committees and backroom power brokers decide who is guilty and innocent ‘in special cases’ before trials ever get before juries then in my opinion we do not have anything close to ‘one rule of law for all men’ – we have a ‘green light’.

But before they went down that route I’d have offered some food for thought.

Some Contracts may resemble Toilet Paper

The first point to clarify is the country the contracts apply to… where they were signed… the jurisdiction of any legal resolution – where you have to appear in court if the contract comes to a dispute.There are three major legal systems and they don’t treat contracts equally – Common Law (the British System), Civil Law (the European System) and Islamic Law. Each individual country also has it’s own business context including political risk and economic profile. And specific countries offer unique challenges to doing business that should be considered.

If the contract is Bulgarian then you might have to hire lawyers and attend hearings on specified dates in Eastern European Civil Courts.

On the other hand, if this is an Australian contract then how do you force the Bulgarian web design firm to appear on a given date in the appropriate court in Sydney? And how do you force them to adhere to the Australian court’s judgement? If you were awarded AUD$20,000 damages then how would you enforce that fine in Bulgaria? Or African or Middle Eastern countries? Or the United States where you might be sued on that contract, have to fly to appear with US lawyers and fight an extended and expensive legal battle with huge monetary consequences if you lose.

Were you to have a legal contract with an Indian firm… any court would take between 10 and 20 years to hear the case due to stress on the Indian legal system. You may never see a resolution.

The bottom line is that a contract you can’t enforce or that has you at such a disadvantage is worse than toilet paper to your business. It might lead to your being sued in a foreign country under a different legal system and possibly in another language.

Client Privacy and Security Concerns in a Wire Canoe

The next consideration has to be privacy and security. Were you to send client data (ie. access to database content or client files) to another country then THAT COUNTRY determines the appropriate privacy laws and enforcement. This was true when Telstra sent all of our Australian accounts offshore to Indian call centres exposing their customer base to increased identity theft. If the Bulgarian web firm stole and misused this customer data then it could kill your business.

At the same time the entire infrastructure of the online business is exposed to an overseas business entity that, let’s be honest, you really don’t know anything about. What are their business motivations and relationships? Have they used black hat search engine optimisation techniques? Did they insert malicious code? Are your website visitors going to be installing malware under your name? These cheaper Bulgarian web designers are being provided access to your passwords, file structure, email accounts and sensitive information.

If that isn’t bad enough – what are the consequences if they betray your trust? You could go out of business. You may have no financial capacity to recoup the loss or pay for the damages out of your own pocket. Just as any 60 year old pervert can say they are a 12 year old girl in an Internet chat room… anybody can tell you they run a web design business in Bulgaria.

A Dollar Spent Elsewhere doesn’t turn the Merry-go-round

Believe me, I’ve got an MBA and understand the ideals of globalisation and free trade as much as the next guy. But the reality is that by chasing the budget option off-shore there are hundreds or a few thousand dollars no longer circulating in your local community. That’s a bigger deal than it sounds.

When you spend dollars at the local grocer to buy milk then the grocer can buy shoes for his child and the dairy farmer can buy the newspaper. In turn the shoe seller and the newspaper seller receive their portions of that dollar and can buy goods they need or want for their families. Money isn’t a one-time transaction, it continually renews itself through a community increasing the social value of it’s footprint. Not investing in local talent is shooting your community in the foot – less money attracted for business investment, less money for schools and infrastructure, less money for the merry-go-round of opportunity for your own children.

Because what looks like a good deal – getting somebody to work at $5 per hour – is at the heart of it exploitative anyway. It’s no different than a large company moving production to India to avoid labour laws or safety regulations.

I’m not saying never to outsource overseas… but do it for the right reasons and be prepared to pay the appropriate value for their work. Make that decision with an understanding of the inherent business risk that comes with the decision.

There’s a saying in business – “There’s no such thing as a free lunch.” Whatever decision you make about your web design services be prepared to grab your wallet.

Australians, Please Ignore Contract Law on US Television

How many times have you heard people insist that such-and-such was law because they saw it on American television. That’s kind of funny but it’s not cute at all when you’re in business. The series of articles linked to below provide an overarching view of Australian Contract Law (note the disclaimer on your way into each one) that draws from a number of credible and authoritative resources (noted at the end of this page).

Australian Contracts 101: The Series

• Contracts 101 – Part 1: Outline
• Contracts 101 – Part 2: Which Contract?
• Contracts 101 – Part 3: The Six Elements
• Contracts 101 – Part 4: The Agreement
• Contracts 101 – Part 5: The Offer
• Contracts 101 – Part 6: The Acceptance
• Contracts 101 – Part 7: Battle of the Forms
• Contracts 101 – Part 8: Consideration
• Contracts 101 – Part 9: Capacity
• Contracts 101 – Part 10: Legality of Object
• Contracts 101 – Part 11: Possibility of Performance
• Contracts 101 – Part 12: Genuine Consent
• Contracts 101 – Part 13: Promissory Estoppel
• Contracts 101 – Part 14: Ending the Contract
• Contracts 101 – Conclusion: Protect your Business

Who Should Read this Series?

If you’re a freelancer, think you’re ever going to be a freelancer, if you’re a business person, entrepreneur or just a curious bastard in need of some refuge in the interminable boring world of contract law… then have I got the goods for you. All jokes aside, you need to know when and when not to respect contracts… what constitutes a contract in the eyes of the Australian legal system… and how to assess whether or not you need to employ a lawyer before things get past the point of crisis. This post can save you money off your bottom line… so bookmark it.

Links to precedents have been included to assist you in at least having a cursory ability to enter a discussion about a contract – it’s bamboozle proofing.

Resources for this Series

The bulk of this information is obtained through Australian Business Law 26^th edition by Paul Lattimer, Managers and the Law: A guide for Business Decision Makers by Lynden Griggs, Eugene Clark and Ian Iredale, A Guide to Business Law thirteenth edition by John Carvan, John Gooley and Evelyn McRae, Law in Commerce third edition by Brendan Sweeney and Jennifer O’Reillly, as well as through the MBA unit BFA682 Law for Managers taught at the University of Tasmania by Simone Watson in 2009. These resources are highly recommended for improving your understanding about these issues. Many case files hyperlinked within this series are directly accessed via the Austlii database (Australia) and the BAILLI database (United Kingdom).

The Pinto Case is cited widely in the academic literature of business management, organisational behaviour, management ethics and related disciplines. My question is why? The facts of the case are well documented in law journals – yet the Pinto myth maintains traction in business schools around the world. One article wrote that if it was untrue then it is the very case that an ethics course would invent. In that light, it is time for the Myth of the Pinto to be pushed aside by the actual facts of the case.

The Ford Pinto Myth as Espoused by Business School Professors

The case of the Ford Pinto, in the early 1970s, is usually put forward to students as a matter of fact. The young Turk Iacocca, rising on the success of the Ford Mustang, pushed for a sub-compact car to cost no more than $2000 and weigh no more than 2000 pounds. The production schedule of the Pinto was only 25 months, whereas industry standard was 43 months. In crashes over 25 miles per hour the fuel tank always ruptured spilling fuel onto the road, the low fuel tank was situated behind the differential and would get rammed into it on collision causing a spark and then ignition. At the same time, a rear end collision would cause the doors to jam shut and the result was a deadly fireball which incinerated its occupants.

The story gets more sinister when it turns out that the Capri’s tank was higher and therefore did not suffer the same problem. The Pinto’s fuel tank problem went unfixed for several reasons: Iacocca wanted the Pinto in showrooms by 1971; Iacocca would not suffer negative reports so nobody told him this flaw had been identified during testing (safety was not a Ford priority); and, a cost-benefit analysis of loss of lives compensation versus the cost of fixing the Ford Pinto’s fuel tank meant it was cheaper for Ford to ignore the problem and pay off the victims.

The cure would have been a simple $11 per vehicle fire prevention device… and an alternative bladder could have achieved the safety requirement for a mere $5.08 per vehicle. At around this time the academic has their student morally enraged.

The story is BULLSHIT and it is time that academics from the business schools stop spreading it around as the truth.

The Pinto Myth Debunked in Rutger’s Law Review, 1991

Enter another professional body who have well and truly debunked this myth a good 20 years ago – Myth of the Ford Pinto Case is from Rutger’s Law Review, 1991 volume 43:1013. You can download the Myth of the Ford Pinto Case from PointofLaw (link on the right side of their page). You can also read Grimshaw v Ford Motor Company (1981) online.

Over a wide range of reading about the Pinto case several things came to light. Lee Iacocca was not the great villain of all time, he went to revive the Chrysler Corporation in the 1980s and became a legendary working man’s hero. There was never any evidence Iacocca knew of anything regarding those fuel tank allegations. The Pinto’s fuel tank was not an unusual configuration for a sub-compact at that time in the US market, it was no safer or more dangerous than other cars of it’s type. Sub-compacts are an inherently more dangerous vehicle than a larger car, it remains a fact of life today. We compromise safety and luxury for economy and convenience. One key reason for the controversial low fuel tank placement was that the Pinto was a hatchback, the fuel tank needed to be lower by necessity (common practice in its market of the early 1970s). At the same time, European cars had the higher tank which caused splashing of fuel onto back seat passengers in accidents – so the espoused cure was another compromise of safety.

Dowie’s facts in the Mother Jones article were blatantly wrong and clearly sensationalised to meet Dowie’s agenda. The offending cost-benefit analysis Dowie mentioned was never undertaken in the context of evaluating the Ford Pinto’s fuel tank in isolation. All Ford product lines were represented in the analysis and the cost of a human life was determined not by Ford but by a relevant government administrative body much earlier. This so-called damning cost-benefit analysis had been created for the insurance body, on request. It was not performed for the assessment of Pinto deaths by fire in rear-end collisions, as espoused by Dowie.

There was never any evidence to support the claim that the Pinto production schedule was 25 or 38 weeks… it may have been grossly mistaken by Dowie.

The US government openly asks designers to compromise between economics and safety. After all, the safest car in the world would never be built so trade-offs are essential to achieve product viability and industry competitiveness.

Why Do Business Academics get this so Wrong?

I won’t get into the nuts and bolts of this case beyond asking you, the reader, to pass this information around to every academic you encounter who insists on passing the Pinto Myth along the academic food chain. The practice is sheer laziness with the facts and should be contested wherever the Pinto Myth raises its ugly misinformed head.

My question to academia is why? If Rutger’s Law Review debunked this myth in 1991, why is there a business school obsession with professors quoting the Pinto case as fact in academic literature over multiple disciplines? In each and every case I encountered, a fast backtrack through the referenced articles traced genealogically back to the Dowie article in Mother Jones. Even today, in a Strategic Management lecture, several students passionately raved about the Pinto Case as fact because another MBA professor had used it as a case study.

The Pinto Myth is BULLSHIT and does not belong in serious academic literature. Further, it does not even belong in our living room. Academic articles should never trace back to a popular published magazine article, because the source is generally unsafe… otherwise dig much deeper independently.

Curiously, there is also a complete divergence between management and business literature and the law literature. How can this be so? Business academics need to take this as a call to caution in their research, they must read more widely. The Pinto Case, as espoused, is wrong and easily unfolded. I can see no excuse.

Text Books – Management

• Fundamentals of Management (Pacific Rim Edition) by Danny Samson and Richard L. Daft
• International Business: Managing in the Asia-Pacific (3rd Edition) by Greg Fisher et. al.
• Strategic Management: Competitiveness & Globalisation (Asia Pacific Third Edition) by Hanson et. al.
• Cold Steel: Lakshmi Mittal and the Multi-Billion-Dollar Battle for a Global Empire by Tim Bouquet and Byron Ousey
• Managers and the Law: A Guide for Business Decision Makers by Lynden Griggs, Eugene Clark and Ian Iredale
• Essential Foundations of Economics (4th Edition) by Robin Bade and Michael Parkin
• Accounting 4: An Introduction by Atrill et. al.
• Principles of Managerial Finance by Gitman, Juchau and Flanagan
• Organisational Behaviour on the Pacific Rim (2nd Edition) by Steven McShane and Tony Travaglione
• Organisational Behaviour (5th Edition) by Robbins et. al.
• Marketing Principles & Best Practices 3e (International Student Edition) by Hoffman et. al.
• Internet Marketing: Strategy, Implementation and Practice by Dave Chaffey et. al.
• Human Resource Management: Strategies and Processes (5th Edition) by Alan Nankervis, Robert Compton and Marian Baird
• Writing for Journalists (2nd Edition) by Wynford Hicks et. al.
• Editing Made Easy by Bruce Kaplan

Text Books – Computing

• Artificial Intelligence: Structures and Strategies for Complex Problem Solving by George F. Fluger
• Operating System Concepts (7th Edition) by Silberschatz, Galvin and Gagne
• Your UNIX: The Ultimate Guide (2nd Edition) by Sumitabha Das
• Data Communications and Networking (4th Edition) by Behrouz A. Forouzan
• PHP and MySQL Web Development (2nd Edition) by Luke Welling and Laura Thomson
• Java Software Solutions: Foundations of Program Design (3rd Edition) by Lewis & Loftus
• Data Abstraction and Problem Solving with JAVA: Walls and Mirrors (International Edition) by Frank M. Carrano and Janet J. Prichard
• Data Structures and Algorithm Analysis in C (2nd Edition) by Mark Allen Weiss
• Object-Oriented Software Engineering: Using UML, Patterns and Java (2nd Edition) by Bernd Bruegge and Allen H. Dutoit
• The C Programming Language (2nd Edition) by Brian W. Kernighan and Dennis M. Ritchie
• Computer Confluence: Exploring Tomorrow’s Technology (IT Edition) by George Beekman and Eugene J. Rathswohl

Text Books – Not Mine (But Read)

• Management Information Systems: Managing the Digital Firm (International Edition) by Kenneth C. Laudon and Jane P. Laudon
• Electronic Commerce: A Managerial Perspective 2006 by Efraim Turban et. al.

Non-Fiction Purchases (Web Development)

• Designing with Web Standards by Jeffrey Zeldman
• The Zen of CSS Design by Dave Shea and Molly E. Holzschlag
• Transcending CSS: The Fine Art of Web Design by Andy Clarke
• Bulletproof Ajax by Jeremy Keith
• DOM Scripting: Web Design with JavaScript and the Document Object Model by Jeremy Keith
• DHTML Utopia: Modern Web Design Using JavaScript and DOM by Stuart Langridge
• The PHP Anthology: 101 Essential Tips, Tricks & Hacks by Davey Shafik et. al.
• Core MySQL: The Serious Developer’s Guide by Leon Atkinson

Non-Fiction Purchases (Other)

• Sketching User Experiences: Getting the Design Right and the Right Design by Bill Buxton
• Here Comes Everybody: The Power of Organizing without Organizations by Clay Shirky
• Monkeyluv: And Other Stories on our Lives as Animals by Robert M. Sapolsky
• Confessions of an Eco-Sinner: Tracking Down the Sources of My Stuff by Fred Pearce
• What the Dog Saw: And Other Adventures by Malcolm Gladwell
• Outliers: The Story of Success by Malcolm Gladwell
• The Limits of Power: The End of American Exceptionalism by Andrew J. Bacevich
• The Accidental Guerrilla: Fighting Small Wars in the Midst of a Big One by David Kilcullen
• No Standing Only Dancing: Photographs by Rennie Ellis, National Gallery of Victoria
• Impossible Nature: The Art of Jon McCormack by Jon McCormack et. al.
• The Fabulist: The Incredible Story of Louis De Rougemont by Rod Howard

Electronic

• Blue Planet Run: The Race to Provide Safe Drinking Water to the World by Rick Smolan and Jennifer Erwitt
• The Public Domain: Enclosing the Commons of the Mind by James Boyle
• Remix by Lawrence Lessig
• The Future of Ideas by Lawrence Lessig
• Code: version 2.0 by Lawrence Lessig
• Web Form Design: Filling in the Blanks by Luke Wroblewski
• Mental Models: Aligning Design Strategy with Human Behaviour by Indi Young
• Build Your Own Ruby on Rails Web Applications by Patrick Lenz
• The Art and Science of CSS by Cameron Adams et. al.
• The Principles of Successful Freelancing by Miles Burke
• How to Make a Book by the Blurberati
• Street Photography for the Purist by Chris Weeks
• The Photoshop Anthology: 101 Web Design Tips, Tricks and Techniques by Corrie Haffly
• Tribes: We Need You to Lead Us by Seth Godin
• The Dip by Seth Godin
• 99 Cows by Seth Godin
• Bootstrapper’s Bible by Seth Godin
• Unleashing the Idea Virus by Seth Godin

Fiction

• The Collectors by David Baldacci
• Hannibal Rising by Thomas Harris
• A Most Wanted Man by John LeCarre
• All the Colours of Darkness by Peter Robinson
• Red Rabbit by Tom Clancy
• The DaVinci Code by Dan Brown
• Velocity by Dean Koontz
• The Darkest Evening of the Year by Dean Koontz

Rule 1 – we’ll call it the Primary Litmus Test – is therefore to avoid arseholes who throw the word sue around the ballpark even as an idle threat in casual conversation. At best they are bullies – at worst they will cost you a fortune. Its just not good business having them around. Rule 2 is simply to always apply the Primary Litmus Test (Rule 1) to your business relationships. Do unto others…

Its not about who feels vindicated and what some old man in a white wig says when its all said and done – who gives a flying crap about being right or wrong in business? Seriously. What you care about is the fact that even if its something relatively trivial then you’ll have to employ legal counsel and defend yourself in court. How much is that going to cost you? How much business are you going to miss being tied up with that rubbish between reading case files, meeting cousel and appearing in court?

The best you can come out from court is breaking even. The judge may even award a token dollar! Wow, awesome. But even if you’re right the things you stand to lose are your business and your house and other possessions. The only winners in court are generally the lawyers, remember that.

So every time you see or hear or rub shoulders with some asshole who goes on about having to sue somebody over absolute rubbish then put them onto your personal never to do business with again list. I recall ditching a business association cold one night several years ago for that very reason. Even mention sueing me and I’m out of your life like a rocket. I don’t do business with assholes who might sue me over rubbish. Neither should you.

And always tell yourself that court is the last resort. Always. And only if its worth it as a return on investment. Never make it about pride and ego.

Throughout the Contracts 101 series there has been a central theme that has been driven home – contracts are not flippant agreements that we should be self-authoring. In the web development profession, of which I would claim a token place, there is strong industry-wide promotion of the cost savings for self-authored contracts. Therefore my main point, if you take anything away from this series, is to appreciate the complexity of the simple contract under Common Law.

Avoid Potential Catastrophic Costs

First, there should be an appreciation for why we make contracts. My personal opinion is that a contract is not primarily entered with the motivation of forcing the other party to comply. I would contest that you enter a contract to protect yourself from having to hire lawyers and defend yourself within your own country’s legal system or abroad in other legal systems. The potential catastrophic cost of being held accountable for a misunderstanding between contract parties far outweighs the big stick mentality that most small businesses appear to associate with contractual relationships. Particularly under Common Law systems there needs to be a detailed contract drawn up that covers a lot more than you would need in a Civil Law juristiction.

Only enter Win-Win Contracts

Second, there needs to be an appreciation that contracts should always be worth the cost of creating and performing to your business. By that I don’t mean to denegrate contracts or suggest that you should omit them from your business processes. However, I do mean that flippantly signing contracts that you cannot afford to defend or enforce seems to be a waste of your business time. In other words, negotiation of the contract and ensuring that both parties come to a fair win-win outcome is far more important than the documentation that you walk away with after the agreement is struck. Because the court will not enforce one-sided unfair contracts that you bullied others into entering. And, when you think about it, the unhappy party in a win-lose contract may take your case to court for a judicial outcome – which is expensive and may take months to a decade before resolution.

Know When to Consult a Lawyer

Third, there needs to be an appreciation that hiring a lawyer is a business expense that we need to be prepared to endure. If you cannot justify the expense then the contract is probably not worth your while to take on board. Do you hire an architect? A database engineer? A doctor? An accountant? Then why does it seem to be a catch-cry of the web development industry that we self-author contracts? Hire a legal professional as the need arises – with a view to the potential losses of not hiring them. This boils down to a simple business risk-management decision. Or, more succinctly, if you write your own contracts then employ a legal professional to offer you advice to it’s flaws and validity under Common Law.

Thankyou and Acknowledgements for this Content

Finally I need to reinforce upon you that I am not a lawyer. However, the resources used to collate the Contracts 101 series are taken directly from the University of Tasmania’s MBA program. To that extent, these installments were taken directly from my personal study notes taken early in 2009 and due to the nature of those notes there may, and probably will, be paragraphs or examples directly taken from several of the following resources. As such the sources need to be given and appreciated and I thank the respective authors in advance for their understanding that this information is not repeated in a commercial context.

There is a strong hope on my part that small businesses, particularly web developers, might take this series on board and become a lot smarter about how we deal with contracts.

Resources for this Series

The bulk of this information is obtained through Australian Business Law 26^th edition by Paul Lattimer, Managers and the Law: A guide for Business Decision Makers by Lynden Griggs, Eugene Clark and Ian Iredale, A Guide to Business Law thirteenth edition by John Carvan, John Gooley and Evelyn McRae, Law in Commerce third edition by Brendan Sweeney and Jennifer O’Reillly, as well as through the MBA unit BFA682 Law for Managers taught at the University of Tasmania by Simone Watson in 2009. These resources are highly recommended for improving your understanding about these issues. Many case files hyperlinked within this series are directly accessed via the Austlii database (Australia) and the BAILLI database (United Kingdom).

Installments in Contracts 101

• Contracts 101 – Part 1: Outline
• Contracts 101 – Part 2: Which Contract?
• Contracts 101 – Part 3: The Six Elements
• Contracts 101 – Part 4: The Agreement
• Contracts 101 – Part 5: The Offer
• Contracts 101 – Part 6: The Acceptance
• Contracts 101 – Part 7: Battle of the Forms
• Contracts 101 – Part 8: Consideration
• Contracts 101 – Part 9: Capacity
• Contracts 101 – Part 10: Legality of Object
• Contracts 101 – Part 11: Possibility of Performance
• Contracts 101 – Part 12: Genuine Consent
• Contracts 101 – Part 13: Promissory Estoppel
• Contracts 101 – Part 14: Ending the Contract
• Contracts 101 – Conclusion: Protect your Business