How Far Can An EULA Go?

We read this news with mixed glee and horror: a company called Telly is giving TVs away, for the low price of having to live with an always-on advertisement bar and some pretty stringent terms and conditions. Break the terms, and they’ll repossess your TV. If you don’t give them the TV, they have your credit card on record and they think the set is worth $1,000.

The hacker in me sees free hardware, so I checked out the terms and conditions, and it doesn’t look good. They’ve explicitly ruled out opening up or physically modifying the device, and it has to continually have WiFi – for which you pay, naturally. It sounds like it could easily tell if you try to tamper with it. My next thought was, perhaps too cynically, to get one, put it in the closet, and wait for the company to go bankrupt. Because you know that business model isn’t going to last.

But it’s clear that they’ve seen through me. The most bizarre clause is that you have to “Use the Product as the primary television in Your household”. Now, we’re not lawyers, but it seems like an amazing stretch that they can tell you how intensively you are to use the product. Can you imagine a license with a keyboard that demanded that you only use it to write sci-fi novels, or that you have to use it more than any other keyboard?

Nope. Too many hoops to jump through for a silly free TV. You can keep your dystopian future.

70 thoughts on “How Far Can An EULA Go?

  1. I am not a lawyer, but looking at the TOS, there does not seem to be anything to block putting a cover over the advertising screen, as long as you don’t attach the cover to the device (as they prohibit hardware mods and attachment of unauthorized peripherals), but just hang it off the wall. You might need a cutout for the camera, though actually the TOS don’t seem to say anything about keeping the camera uncovered.

    1. Just suspend a photo of the inside of the Sistine Chapel a few inches in front of the camera. And give the microphone something to do by placing radio tuned to static or some undesirable station.

  2. They also have effectively excluded viewers under the age of 13.
    It is questionable whether you are allowed to have it running while you have a party at home (or too many parties) where many can view.
    They prohibit the use of specific software they do not like on you /own/ WiFi network (ad blocking, see pihole). Good luck with that!
    They prohibit your own email to have an auto-responder. Wow!
    “…or otherwise obtain the source code…”. That statement reeks like they are using FOSS in the machine and are unwilling to abide by the proper licenses.

    Well, it is unconscionable to have anything to do with such terms and company. The effective targets are ID10T targets and they would get nothing that would be of their advantage. It is a carrot on a stick and string held in front of you.

      1. My credit card has a hard limit of $250 per day (in case thief stole my wallet) and most companies are going to see “non-sufficient fund” or something if they tried. Thus they aren’t likely to figure out trying to bill me a smaller payment every day to get around the limit.

        Can the TV be shut off and locked out by remote?

        1. They stop talking to you when they can’t preauthorize the card.

          You can bet it doesn’t display anything but phone number when it can’t IP home. You can also bet it’s generic hardware, so a board swap would fix it, but nobody will bother.

          This is directed at a pink unicorn among consumers, has $1000 credit available, but willing to take crappy TV (for potential ‘price’ of 4x real value) with included camera and ad display. They’re looking for financially better customers then the typical RTO chumps, but even _stupider_.

          Has Camera, maybe the Chatroulette/omingle(Kermit) crowd. But no reaction, so no.

          How did these twits get funded? That’s the number I want, they’ll fund any dumb idea. Lucky to get together with their money in the first place. It would be an immoral act not to word salad up a business plan, just for them.

      2. cancel the card the day the set shows up or place that company on a do not accept any charges list with your card company! (possible on all cards via fraud prevention dept.) also what set today is worth that kind of cash? local walmart had 55 inch name brand smart tvs for under 400 bucks a week or so back. new smart sets get all sorts of free channels with great programs all on a guide, for a grand and the rules this set has It nust be an 8K 150 inch 3d smart t.v. with included 1000 watt surround sound, DVR, free HBO and get every channel, PPV event, from any country on the planet and either make its own pop corn for you or order snacks via door dash nightly all included and free………….
        Na FORGET IT!! THESE FOLKS ARE GOING TO GO BYE BYE Bankrupt and gone probably before any t.v.s get delivered!! Not a good or workable plan, borderline scammish. stay clear, pick up any hardware on the surplus market next month EULA’s dont apply to surplus from nonexistant firms!!

        1. A 55″ high-end current generation OLED will run about $1500, but you can find them refurbished like-new with warranty for $1000. I just upgraded 7 months ago from non-OLED, and it’s worth it if you can afford it.

    1. Contracts 101: Obviously you accepted the terms when you took the TV. The offer is the TV, the consideration is your willingness to watch ads 24/7, and the acceptance is you clicking “buy” or “subscribe” or whatever the button says.

      If you breach the contract by not doing what you clearly agreed to, they have a cut and dry case in small claims court (or more likely in the arbitration you agreed to in the contract) and will get $1000 from you plus attorney’s fees.

      If you try to trick them with your temporary or charge-limited credit card, they’ll see you in arbitration again. Or maybe destroy your credit score or something.

      Seriously, this community is so legally illiterate, it’s not even funny. The Dunning–Kruger effect seems to run rampant here.

      1. Sure this is what could happen on paper, but will it actually happen in real life? Usually companies just give up if it’s below a certain dollar amount, or they send it to collections so you just have to ignore phone calls for 10 years or so until they forget whose debt it is and can’t prove it’s yours.

        1. Sure, maybe. But if this were your whole business model, wouldn’t you have considered all of the possible ways people might try to cheat you and come up with cost-effective solutions? Yeah, a company like this probably won’t last very long as others have said, but I for one am not willing to risk $1000, my reputation, or my credit score on trying to cheat some company out of a cheap TV. Are you willing to take that risk?

      2. The question is whether clicking a button constitutes signing a legal binding contract.

        Most items nowadays contain such a button that says you accept the terms of service. If I don’t accept the terms, what law prevents me from clicking any random button on a device that is my own property ?

        1. “The question is whether clicking a button constitutes signing a legal binding contract.”

          Where have you been for the last 20 years? This is a well settled point of law upon which trillions of dollars of economic activity relies. Look it up if you don’t believe me.

          “If I don’t accept the terms, what law prevents me from clicking any random button on a device that is my own property ?”

          You’ve got it backwards. You have complete freedumb to click whatever buttons you wish, just as you have complete freedumb to walk around with a pen and sign your name wherever you wish. But if you happen to sign on a signature line, it might have consequences. Acceptance is the expression of intent to be bound by the terms of the contract. Expression of intent is different than actual intent; it’s an action (or inaction) that can be reasonably understood by the other party to reflect actual intent. This means that actual intent to be bound or not bound by the terms of the contract doesn’t matter. So if you sign a contract or click the buy button while secretly crossing your fingers behind your back, you are still bound by the contract. Even if you didn’t take the time to read the terms. Again, basic contract law that has been around forever.

  3. Wait for the message.
    “Regrettably, we have ceased operations due to lack of demand. As per the terms of your contract, please ship the TV back to us at your expense, using the original packaging. If you wish to keep the TV, or you cannot ship it back withing 30 days, your card will be charged the $1000 cost.”

      1. Pre-auth charges cannot be cancelled by cancelling a card. Where i used to work, they fired someone with an active rental car, and the company got stuck with the rental car cost until he was bored with it.

        1. >Pre-auth charges cannot be cancelled by cancelling a card.
          So if I don’t have that card and I don’t have money in that bank, who is billed and what account does it come from?

          1. preauth and credit holds last between 7 and 30 days depending on the card and how the hold is specified.

            In the case of the person you replied to, the company had a 30 day preauth for damages which is common for a rental.

            If say you rented a car, then closed the account for that card. What would happen is the bank would pay out, then contact you to recover the overdrawn balance. If you decline to pay, the bank will report it to ChexSystems which can result in you not being able to open accounts at other banks. They may also sell it to a debt collector, or write it off. If they write it off they’ll report it to the IRS as income and you’ll have to pay taxes on it.

            In THIS situation though I assume it would be more than 30 days for the TV spyware company to attempt a charge so a new auth would be required and if against a closed account would be declined. The only types of charges that are processed against closed cards are recurring, and then only if the card is reported lost (usually) but the account is still open. This charge would certainly not fall into that category.

            Hope that helps clarify!

      1. I’ve seen LCD monitors in the 27″ range for under $20. Connect it to a PC running streaming software or use a steaming box. Antenna? Why limit yourself to a few free channel that may require fiddling with antenna to get optimal signal when streaming box like Roku already has free services including some TV stations. I can get ABC, NBC, Faux, and CBS for free on mine. (got to put up with ads like old over the air signal)

    1. Same here. My next TV will be a non-smart unconnected one, either a signage display or a big monitor, with every media functionality moved to a liberated Chromebox turned Kodi player plus a Edision player reflashed with FOSS Linux firmware, both of which I already own. The heck if I’ll let that crap into my house; too much is too much.

      1. You can actually get a 4k dumb TV for cheap.

        One place left.

        Sceptre house brand.

        Fry’s used to have them online too, w different branding.

        The 43″ 4K display makes a great monitor, using it now. IIRC $200 with shipping and tax.
        The 50 is slightly too large IMHO. Unless you can move it back a little, but then why. 60Hz refresh is the only real drawback, bone average IPS screen (same as 95% of TVs). Speakers suck, but all TV speakers suck, just not quite so hard. HDMI only, but gets 60Hz at 4K.

        You’ll have to bear the shame of owning such a crap brand. Assuming anybody ever comes to your house.
        You could 3D print an alternative logo, glue fixes all.

        1. Costco just had a two-day sale on a “50 inch class” Hisense TV, $180; I guess it was popular as it’s now out of stock.

          Assuming a two-year lifetime, that’s $7.50 a month.

          You have to wonder how cheap (not “frugal”; big difference) someone would have to be in order to accept the ball-and-chain terms of the “free” TV, just to save $7.50 a month. Then again, it’s likely that the idea of FREE blinds the prospective buyer to the terms and conditions.

          1. I’ve got a 43″ 4K Hisense TV from Costco I bought about 6 years ago that I use as a monitor for my desktop. It works great. I’m not a gamer, so I don’t know how it would perform in that roll, but it makes a great monitor for writing code and web surfing. It’s a “smart” TV, but I’ve never hooked it to the net, so , meh.

          2. Not just “cheap”, but stupid. If something says “free” but expects any card details at all you should be very suspicious of it. If something says “free” and expects any financial details at all for sign-up then “free” is something it does not plan on being.

    1. Those are Smart TVs however, aka spyware. To be reasonably free of spyware and annoyances, the price is much higher. On the upside, with that money one gets some serious hardware that is rated to be kept on 18/7 or even 24/7 and doesn’t crap out at the first mains glitch or dies of bulged capacitors after 2 years.

      1. Without (unfiltered) internet, any “smart” TV is dumb as a brick, so why pay extra for not having features you can easily disable? Besides that, I never had a flat screen TV in the lower price range fail because of a power glitch or lousy components. The 2 yr warranty mandated by consumer laws here obviously improves quality. In the past, analog sets often died early, but warranty was only 6 mo back then.

      2. It’s only ‘smart’ with an internet connection. My TV is connected to my PC and mains supply. I could plug in the aerial and network cable but I can’t see that happening.

  4. Will be fun to see how this one turns out. Hopefully at some point there will be a bunch of excess inventory available for hacking. Under one’s own control, a second screen could be useful.

  5. This reminds me of a few months back when a publisher inserted a (almost definitely unenforceable) EULA at the front of a book saying “You can’t give away, sell, lend, or trade this book, buy a new copy for every person who reads it”. Granted, that’s a little different because you’re outright buying a book versus entering into an indefinite contract to rent a TV in exchange for ad tracking data, but it’s still such a massive overreach. I kinda can’t wait for someone to sue Telly over this and see if any of this is legally enforceable.

    1. For the use those are no longer legal. Pretty much anything is ‘legal’ until its contested in court and undone. In the case of these things thats what happened as ‘first sale’ went to the Supreme Court and they invalidated it. If you buy it.. you can sell it.

    2. Remember the click through license email virus from the 90s?

      Subject was ‘by opening this email you agree to the terms contained herein’.
      The terms required you to forward the email to everyone in your address book unmodified.

    3. This is a lot different because of the Doctrine of First Sale. When you buy a physical object you own it, and can give it away or resell it. The seller can enjoin what you can do with the information printed or encoded on the device, which is why printer manufacturers started putting chips in their ink cartridges. And you can’t make copies of the book and pass them around while you keep the original. But you can loan, give, or sell it to anybody. This is why nearly every movie that has ever been available from is still available, because DVD’s are physical objects, while finding a particular movie on streaming is like playing whac-a-mole.

  6. What freaked me out was the stuff about the keyboard. Can you imagine a keyboard that had a list of trigger words/phrases? Type one or more and it phones home to the appropriate authorities?

  7. I predict Telly will be belly-up within a few (three to five) years. The economics of this don’t make sense, to me at least, unless they anticipate a majority of customers will break the contract terms. But in that case, they’re going to have a lot of pissed-off EX-customers, who will no doubt be vocal about it, and they’ll have a warehouse full of used TVs with little value. Sure, they can clean them up and foist them upon new users, but I don’t believe that would make a good impression. All of that should drive away future potential customers. Eventually…?

    Even assuming a majority of broken contracts, are they going to make adequate profit from that and selling user/usage data via data brokers? Maybe I’m overestimating overhead costs for this operation, or I’m undervaluing user data, but I can’t see it working long-term.

    Is there really an untapped market of people who want a 55-inch TV, have $1,000 dollars of available credit, but don’t go to a local or online retailer to buy one for ~$400? Or is Telly banking on convincing them that the TV they’re “giving” them is actually free, and saving them ~$400? Another commenter said they’re looking for “pink unicorns,” and I think I have to agree.

  8. I can only remind people here of Shoshana Zuboff’s “Disposession Cycle” (see e.g. [1] for a good discussion; or just read her book).

    This is stage 1, Incursion. Quoting [1]:

    “The incursion stage is when a tech company makes a brash move into a space or business vertical in order to turn it into a digital market.”

    The outrage caused is part of the game here (remember Google’s Glassholes?).

    Phases 2 (habituation) and 3 (Adaptation) will take care of that.

    Thing is, unless we techies get off our collective arses no one else will do. It’s our f***ing responsibility.

  9. I’m a fan of the form factor. Using the second screen for cover art or Xray in video streaming, as an app drawer or just to drop the main screen off when I’m playing audio would be great for me.
    I’d love to be able to buy a second screen to hang off my 65″ that looked like it belonged there.
    When I’ve looked the bar screen ends up costing the same as the main display.

    1. This is the problem! But this also means that wide displays are probably on the market, or will be soon, without the strings attached.

      We’ve seen some (smaller ones) that people have built into cyberdecks, for instance. The wider / bigger ones will probably trickle down eventually.

  10. History repeats . . .

    Anyone here recall the iOpener “captive” computers which got jailbroken in minutes? Company is long gone, I still have a few of these laying around, good for media players, digital pix frames, alarm monitors.

    And no, I would not let ads into my home under ANY circumstances, trying to bribe me with a free TV isn’t going to do it. Now if they want to send me their products free for me to try out and keep, we can talk – maybe.

Leave a Reply

Please be kind and respectful to help make the comments section excellent. (Comment Policy)

This site uses Akismet to reduce spam. Learn how your comment data is processed.