Saturday, February 28, 2009

Shopster Online Agreement, SURPRISE! Part 1.

It turns out that the What Did You Agree To? series has already helped someone. For those of you who have not read other articles of mine, I put forth a series of articles explaining common elements people agree to in a contract that they don't realize. Standard legal mumbo jumbo.

I received an email from Sandra, who wanted to start an eBay business. So she looked at a few different options and decided on going through a drop shipment company. She had read a couple of my blogs and decided she was going to take action, by reading the terms and conditions before she signed up to any store.

She went to a place called, a Calgary based company that is a leader in the virtual store front and dropshipping market. For those who dont know, dropshipping is where Sandra would sell any item, lets say an iPod, and once she gets payment, she tells the dropshipper (in this case Shopster) to pick one of their shelf and mail it to the buyer. Sandra does not have to deal with any stock. Her price has a small markup to address her time, and her eBay or PayPal fees (I will be doing a 4 part series on the PayPal agreements in the next few weeks), and that is her business.

When she went to sign up at Shopster she was greeted by a 7 day free trial. I love free stuff, and I especially love free trials. So does Sandra. As she is punching in her info, tap tap tip tap, she sees at the bottom,

"I agree to the terms and conditions of the Retailer Agreement"

We have all seen this agreement box before. But Sandra knows that there are surprises from reading my articles. So she clicked on the agreement. SURPRISE!!

There opens a new window with the smallest font she has ever seen. So she thinks, I will just print it, and read it on paper. But there is no way to print. The new window has no menu bar or option to print. She immediately got suspicious.

POINT: If a Company makes it hard for you to read the terms, you need to be extra cautious.

A few tips if you are in this situation. When the new window is opened the link is listed at the top (sometimes). You can see this as an example with the image to the right. Alternatively you can copy and paste the document into your email and print from there.

So here is the agreement. Shopster Retail Agreement. Not only is the font small, but the contrast is very poor. It is impossible to read. Sandra asked for my help. So I copied the agreement into Word, and I scanned it. I literally took less then 60 seconds, and I spotted three major issues that Sandra needs to be concerned of.

1. Shopster say they may make Amendments at any time, by just making changes to this document. Right under the heading AMENDMENTS.

While this is common, it is appalling. Even more so Canadian courts have ruled that provided it is publicised, and that the changes are publicised, you are bound to them. Are you supposed to read the document every day to try to find if a change has been made? This is a dirty provision.

2. Shopster say you are 100% liable for anything you sell, YET you can not add to any description or warranty of any item sold. It is under YOUR SERVICES, last clause that says

"You shall not modify or add to any warranty of any product or service."

Now this is strange. How are you supposed to separate yourself from your competitors? What happens if you have used a product and want to write your own review. What if you are willing to add an extra warranty through Square Trade Warranty? Are you in breach then? Strange indeed, and something to be aware of.

3. This is the humdinger. Remember this is a TRIAL. You are testing the market place. So with that in mind look at this clause:

"Unless, you had a relationship with the supplier prior to using the Shopster Marketplace during the term of this Agreement and for a period of 1 year thereafter, you shall not establish or participate in a drop ship relationship outside of the Shopster Marketplace with any supplier that has listed products or services through the Shopster Marketplace."

They sell over one million products, and based on the above, if you don't like their services EVEN WITHIN THE TRIAL, you cant go to any other drop shipper for a period of one year. There may be some that say, "yeah but its obvious that does not apply it is only a trial". Let me put this another way.

The word TRIAL does not appear once in the agreement. Not once. The agreement does not distinguish what is a trial and what is not. The trail is a monetary issue, not a legal issue. According to the agreement you are still bound. So you try their service, and now you are locked in?

There is a reasonable chance that if they came after you, because you signed up for a competitor, after only using the trial, you would win. Those types of clauses can be toothless. They just don't have any bite. HOWEVER it is still a point of argument, and you want to try to avoid problems. Being aware is very important.

Do you see how ludicrous some of these agreements are? I am going to call them about and ask them a few questions about this agreement. It just makes no sense. What happened and what they said will be in Part 2.

Sandra, it was very wise not to click I agree until you read this. Good habits start early.

If you do have legal question about a contract like this, and need to speak to a lawyer, click HERE. Lawyers are online, and can answer your question within minutes for as little as $15

Copyright © 2009 Peter MacSweeney.
All rights reserved. Reproduction in whole or in part without the express written consent of the author is forbidden. Contact the author through the comment form for all inquiries, including media.

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