E3 2013: Xbox One pre-order terms include 'no class action lawsuits' clause

 

If you have already put in your pre-order for the Xbox One, you have already signed away your rights to participate in a class action lawsuit should you have any dispute with Microsoft.

In a page on the Xbox.com website, Microsoft notes the requirements for those who pre-order the upcoming console. In addition to its previously announced need for an Internet connection every 24 hours to play games, Microsoft says that buyers must accept the Xbox Terms of Use, the Microsoft Services Agreement, and the one year warranty on the console.

Part of accepting those terms include "binding arbitration with class action waiver to resolve disputes." That means you must agree to an arbitration procedure if you have an issue with the Xbox One. Buyers won't legally be able to join in a class action lawsuit against Microsoft over the console.

The pre-order page also mentions that the Xbox One uses "a significant amount" of its 500 GB internal hard drive for its system software. There's no word on just how much hard drive space will be open to users.

The page lists the countries that will support the Xbox One: Australia, Austria, Belgium, Brazil, Canada, Denmark, Finland, France, Germany, Ireland, Italy, Mexico, the Netherlands, New Zealand, Norway, Russia, Spain, Sweden, Switzerland, the United Kingdom and the United States.

Finally, the page mentions that some retailers will sell a Day One Xbox Live Gold 12 month membership. The price will include a free download of the Shadow Jago character for the Xbox One exclusive fighting game Killer Instinct.

Source: Microsoft | Image via Microsoft

Neowin's E3 2013 coverage is sponsored by Alienware

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Why American Companies hates the "class action lawsuits" so much anyway,
as they even try to bann it from being filed in first place?

McDonald should include this term to, before their customers eat their products.

Torolol said,
Why American Companies hates the "class action lawsuits" so much anyway,
as they even try to bann it from being filed in first place?

McDonald should include this term to, before their customers eat their products.

It's one of the few things that can stand of to large corporate power.
It's very hard for one (non-wealthy) person stand up to large and well paid corporate legal team by themselves.

If a company fully supports their product, there shouldn't be a need to include this "legislation". Doesn't strike me that companies that do this have a lot of confidence in their product.

Aergan said,
If a company fully supports their product, there shouldn't be a need to include this "legislation". Doesn't strike me that companies that do this have a lot of confidence in their product.


Someone sued McDonalds because their coffee was hot... You don't see a need to cover your bases?

If a known issue (such as the RRoD issue with the 360 the first year) comes to the surface and has the tendency to cause XBox One to malfunction soon after the warranty period or if MS refuses to cover such a thing under warranty, then I doubt this "No class action" lawsuit clause will hold much water in court. Once you are dealing with a defective product, no amount of hand waving in the EULA can prevent legal action (class action or otherwise).

On the other hand, if some early adopters try and sue because they are mad at the very well publicized Internet and Kinect always on requirements then they deserve to get their case thrown out.

Since the agreement specifically states that a "significant" portion of the HDD is used for the OS, I'm now really curious as to how much.

Considering on a 500gb hard drive you only get 465gb of usable space to begin with, then we take away even more than that due to "a significant amount" of system software, which I believe is safe to assume is at least 10gb, that still means your 500gb hard drive is at maximum 455gb of actual usable space.

Windows 8 also has this in the EULA. I'd love to see an attempt to enforce this in Europe taking European consumer rights law in to consideration.

I'm a commercial lawyer and I will try explaining how this works:

"You must accept Xbox Terms of Use (including Xbox software terms and game license terms), Microsoft Services Agreement, and Xbox One 1-year limited warranty. Some games have additional license terms."

"Terms include binding arbitration with class action waiver to resolve disputes."

Simply put that parties have agreed to use arbitration as a way of resolving a dispute rather than litigating the same (i.e. arguing in the courts)

Almost all commercial contracts these days have this clause as arbitration has plenty of advantages over litigation. A verdict given by the arbitrator can also be subjected to challenge if it meets certain grounds as per the law of the land (i.e. the law which governs arbitration)

This is an alternate method of resolving disputes which is well recognized by courts around the world.

Now the question is what would be illegal? If the contract simply said that incase of a dispute, a party cannot approach the court for a remdy then that contract is void but this contract doesn't say the same. It states that arbitration will be used a means to resolve the dispute.

Edited by StandingInAlley, Jun 13 2013, 9:13pm :

StandingInAlley said,
A verdict given by the arbitrator can also be subjected to challenge if it meets certain grounds as per the law of the land (i.e. the law which governs arbitration)

Thanks for the clarification
Just a question, though, does this sentence mean that you can challenge it and have it taken to another arbitrator, or that you can challenge it and take it to a court?

Matthew_Thepc said,

Thanks for the clarification
Just a question, though, does this sentence mean that you can challenge it and have it taken to another arbitrator, or that you can challenge it and take it to a court?

Only in the court of law where the court will set aside the verdict (It's called arbitral award) for the time being in order to decide the issue. Preliminary the court figures out whether a challenge can be made or not depending on the grounds for challenging the award and if the answer is yes then it will adjudicate the issue. Please note that laws vary a lot from place to place and US has a very different system of law but my understanding is that is how it will work in US too.

mattw891 said,
Does anyone on here know the law enough if it's legal to remove somone's rights to a lawsuit this way?

I do need to confirm but I'm almost sure that this is moot in the EU

Is it included in the PS4 preorder? I honestly don't know and I don't plan on reading and trying to decipher a EULA to find out. If it is so standard then I assume it's in both and I totally agree it's a non-issue. If it's not in the Sony one then it IS a difference and worth pointing out. At least as much as the whole "XBox One preorders high" was... high compared to what?

Asmodai said,
Is it included in the PS4 preorder? I honestly don't know and I don't plan on reading and trying to decipher a EULA to find out. If it is so standard then I assume it's in both and I totally agree it's a non-issue.

From http://store.sony.com/webapp/w...oter=true&storeId=10151 (Sony store Terms & Conditions):

Governing Law/Waiver of Jury Trial:
This Agreement and all purchases hereunder shall be governed by and construed under the law of the state of California, without regard to conflicts of laws rules. You agree that the courts of California shall have exclusive jurisdiction over the parties for all disputes. Venue shall lie exclusively and only in either (i) San Diego County, State of California; or (ii) the Southern District of California of the United States District Court. THE PARTIES HEREBY WAIVE TRIAL BY JURY WITH RESPECT TO ANY DISPUTE RELATING TO THIS AGREEMENT OR YOUR ORDER.

I have no idea what that means (well, it seems to be saying that you can't sue them about the order or agreement), but it's the closest thing I could find in a couple minutes of looking

Matthew_Thepc said,

I have no idea what that means (well, it seems to be saying that you can't sue them about the order or agreement), but it's the closest thing I could find in a couple minutes of looking

That appears to say you can in fact sue them but by accepting that agreement you agree to do so under California law. This is likely to prevent you from "Jury shopping" where you go find some local court that seems like you may get a favorable verdict from. Or if you're a cynic you could say Sony has already "jury shopped" and found a favorable court to them that they are having you agree with.

ahhell said,
Fear mongering/click bating at it's finest.

Agreed. This is John trying to whip up a scandal where none exists. This kind of thing is in many EULAs and ToS' these days.

I'm glad I live in the UK, where no amount of corporate legalese like this can take away your statutory rights, even if you sign them (and ordering something online does NOT form a binding contract over here, or anywhere else in the EU).

FloatingFatMan said,
I'm glad I live in the UK, where no amount of corporate legalese like this can take away your statutory rights, even if you sign them (and ordering something online does NOT form a binding contract over here, or anywhere else in the EU).

That is incorrect. Online contracts have been recognized by English courts and have binding precedence. I can get some cases if you would like to read

Recent Google search result showed this - http://www.travelweekly.co.uk/...eed+online+are+binding.html

Even IF that's the case, and that was just a single incident that wouldn't have any bearing on other cases as UK law is not based on precedent, you cannot sign away statutory rights so this contract has zero legal grounding anyway.

FloatingFatMan said,
Even IF that's the case, and that was just a single incident that wouldn't have any bearing on other cases as UK law is not based on precedent, you cannot sign away statutory rights so this contract has zero legal grounding anyway.

That's actually completely wrong. English and Welsh law is based on binding precedent. Many other European countries are not.

FloatingFatMan said,
Even IF that's the case, and that was just a single incident that wouldn't have any bearing on other cases as UK law is not based on precedent, you cannot sign away statutory rights so this contract has zero legal grounding anyway.

The contract law in UK comes from precedents and not statue unlike other countries which means courts make the law instead of Parliament making it in the form of a statue

As long as half of the HDD isn't taken up. I'm ok with it taking 20-50gb I suppose. Shouldn't be a big deal. PLUS... external storage.

threetonesun said,
Even if it was running a full version of Windows 8, I can't imagine it could take more than 25gb.

Try three instances.
Three OSes remember.
Something like
Server Core with Hyper-V role
XBox
Windows 8 Embedded with Windows Runtime

threetonesun said,
Yes, three instances. One operating system.

They said 3 operating systems a couple of times at the unveil last month.
You think they use the same image for all?

John: It appears that you are now looking for something to turn into a scandal, so here is one for you:

If you look at the RGB values of that box picture, the right side color is #090909. If you turn those 9s upside down, you have #060606, you know, #666. So therefore the Xbox One is Satanic!!!1!1!

Come on everybody, post your scandal theories. We need to help the people out who are starting to run out of made up problems to "slam" (that one is for you, John) the Xbox One.

IgorP said,
This just in: StephenBratz, a possible Microsoft employee, SLAMS John Callaham and Xbox One!

Yep, someone who likes and uses Microsoft products must be a Microsoft employee. So who do you work for? Apple? Google? Sony? How much are you paid per attack?

StephenBratz said,

Yep, someone who likes and uses Microsoft products must be a Microsoft employee. So who do you work for? Apple? Google? Sony? How much are you paid per attack?

Perhaps the joke didn't translate as well as I thought. I was just making reference to a typical Neowin style news headline. ie, inclusion of the word "slam" and speculation that someone is a Microsoft employee based on no evidence.

I don't actually think you are a Microsoft employee.

That is all.

Is that any different from the current Xbox EULA? I thought they revised it a couple of years ago after RROD. As for the warranty, I personally don't care as the legal system in Norway gives me 5 years for problems like RROD(stuff that's not all my fault). :-)

Bad press after bad press for Microsoft.
Hopefully there can be some positive feedback over the next few months, but that all depends on both company and the public's actions.

M_Lyons10 said,

Yep. But somehow it's news worthy...


Its a reminder, and thus worthwhile. Enough people get reminded and ****ed, maybe enough will contact their reps and try to get things changed. Granted, knowing the American public, I've got better odds of winning the lottery.

"Real accountability instead of faux outrage? Doesn't that take time away from ESPN and American Idol? And I'll have to change my habits? Pass."

This article gives you the impression that this is something unique to the Xbox One, as if they've chosen to do this at the same time as the DRM and online requirements. When in fact this is just in the normal Terms of Service, and most companies have similar statements in their ToS these days.

Sraf said,
And it has yet to be tested in courts to see if it is enforceable language

It's probably not. Else the judiciary system would be void and useless. Nobody is over the law even if you have a contract saying so. If people have a valid case for a class action lawsuits the court will proceed i'm almost sure of that.

TCLN Ryster said,
This article gives you the impression that this is something unique to the Xbox One, as if they've chosen to do this at the same time as the DRM and online requirements. When in fact this is just in the normal Terms of Service, and most companies have similar statements in their ToS these days.

Although these kind of limitations would not be upheld outside the US....

threetonesun said,
This is pretty standard language these days.

In many US states this is totally not enforceable unless both parties have signed it, though. Same as gym memberships.

In many US states this is totally not enforceable unless both parties have signed it, though. Same as gym memberships.

Problem is, when you sign into Xbox Live, and you click 'I Agree' on each NEW ToS, that is the same as signing it.

I just wonder how one would go about getting a full refund on a console the first time they click 'I Don't Agree' (Since at that point the console becomes useless, or at least Most features are disabled)

threetonesun said,
This is pretty standard language these days.

yes, the language that embolden companies' anti-consumers behaviours, and allows it goes unhibited,
simply becasue they know they wont pay large sums of money if something goes wrong,
and they are in no legal obligation to change their way (which a successful class action lawsuit could achieves).