Do Consumers Read Terms of Service Agreements When Installing Software? -- A Two-Study Empirical Analysis --

Abstract

An important issue in all transactions is the details of the agreement between the parties. This is particularly important in on-line transactions where consumers bind themselves to the detailed terms and conditions without reading them. This paper examines this from two perspectives. The first study reports what respondents self-report they do in terms of amount of time and amount of Terms of Service (TOS) agreements they read. The second study report actual observations of respondents as they “installed” software. The results show most respondents read very little of TOS agreements and the amount of time spent is less than one minute, making it impossible to actually read much of agreements that average over 6,000 words. The primary reasons for not reading TOS agreements are the length of the contract and the perceived cost vs. benefit of reading it, not the font size or legal language. Managerial and public policy implications are examined.