Still More on the Enforceability of Website Terms of Service

Website operators are finally starting to take their website disclosures more seriously, thanks in no small part to the rapidly growing wave of class actions brought against operators who fail to take this evolving area of law into account.

Online terms of service documents are contracts, and like any contract, there are nuances to consider. A recent case in California helps clarify some of those nuances.  In Long v. Provide Commerce, Inc., the defendant was an ecommerce company that moved to compel arbitration based on a provision in its website terms of use, a browsewrap agreement viewable via a hyperlink at the bottom of each page of the operative website.   The court denied the motion, ruling that the terms of use were too inconspicuous to impose constructive knowledge on Plaintiff.

The passive nature of the browse wrap agreement was only one factor in the court’s decision.  The court went on to state that in order to establish the enforceability of a browsewrap agreement, a website operator should be required to actively inform consumers that continued use of a website will constitute the consumer’s agreement to be bound by the website’s terms of use.  As stated in the court’s decision:  “in our view, the problem with merely displaying a hyperlink in a prominent or conspicuous place is that, without notifying consumers that the linked page contains binding contractual terms, the phrase ‘terms of use’ may have no meaning or a different meaning to a large segment of the Internet-using public. In other words, a conspicuous ‘terms of use’ hyperlink may not be enough to alert a reasonably prudent Internet consumer to click the hyperlink.”

Another aspect to consider is the importance of a provision of the terms of service that might become a factor in a lawsuit.  In the Long case, the provision at issue involving giving up an important right: access to a court of law.

Here’s a summary of the ruling that every website operator should take heed of: “Where a website makes its terms of use available via a conspicuous hyperlink on every page of the website, but otherwise provides no notice to users, nor prompts them to take any affirmative action to demonstrate assent, even close proximity of the hyperlink to relevant buttons users must click on—without more—is insufficient to give rise to constructive notice.”

 

Seth Heyman

Seth D. Heyman is a California attorney with extensive experience in advertising and marketing law, corporate law, contracts, governmental regulations, international business, and Internet law. He has counseled numerous successful companies, both public and private, and was responsible for regulatory compliance, contract management, corporate governance, and HR best practices for multiple organizations in many diverse industries, including marketing, telecommunications, energy, and technology development. He offers insight and guidance on federal and state direct mail, TV, radio, telemarketing, and Internet marketing laws, as well as online promotions, Internet privacy, data protection regulations, and similar matters.