Another Court Finds 'Browserwrap' Terms Are Enforceable

from the so-which-is-it? dept

Fri, Jan 8th 2010 3:03am — Mike Masnick

Just a few months ago we wrote about two separate lawsuits involving "browserwrap" or "clickwrap" agreements and whether or not they were enforceable. In the first one, an agreement was found to be enforceable even if the user on the website wasn't forced to view it, but it was just a link away. That seems to be the same view held by the court in a new ruling, that says that even if the agreement is on another page and the user never reads it, the fact that there's a link to it makes it enforceable. Frankly, I have a hard time seeing how that makes much sense, but it seems to be the way the courts are leaning. Of course, it's not all courts, though. Because the other case we wrote about a few months ago found exactly the opposite, saying that such a "browserwrap" agreement is not enforceable because the user was not adequately notified.

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Filed Under: agreements, arbitration, browserwrap, eulas

26 Comments

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cc, 8 Jan 2010 @ 3:41am

These are contracts in every sense of the word, but they don't involve the physical action of *signing* them, which makes them seem benign.

Also, we are observing "herd mentality" here: most people trust that somebody, somewhere has read the contract and found it ok. If nobody has raised the alarm, things ought to be fine.

What's more, in many cases, the moment the user clicks "I agree" this kind of contract simply disappears. Where is the user copy?
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Chuck (profile), 8 Jan 2010 @ 4:58am

Great. I'll make a site and on a link say that you owe me $1 for every minute you're on my site. Good job.
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IANAL, 8 Jan 2010 @ 5:09am

Not again
Weird ... I thought that in order to have a contract between two people there needed to be an agreement upon the terms of that contract. In these cases and others it apprears that the victim was unaware of those terms, which would make the contract unenforceable. In addition, the contract is unenforceable if it is found that the terms of said contract are unconscionable.

I wonder, do these rulings set precedent? What impact will they have upon drive-by downloads? Open the flood gates or the a wave of new scams.
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DS, 8 Jan 2010 @ 5:14am

By viewing this web page, you owe me $100, and agree to mow my law at least once during the summer months.

Ca-CHING!
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- DS, 8 Jan 2010 @ 5:15am
  
  Re:
  You also agree to read "law" in my above statement as lawn.
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slacker525600 (profile), 8 Jan 2010 @ 5:24am

what about ...
what about all the sites that have user terms of service that reserve the right to change at any time without notifying the user? How is that possibly legal or enforceable?
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- Chargone (profile), 8 Jan 2010 @ 4:48pm
  
  Re: what about ...
  i seem to remember an article on techdirt that said something of that nature was not only unenforceable, but rendered the entire rest of the original contract void as well.
  
  but who knows what that means in reality...
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Marcel de Jong (profile), 8 Jan 2010 @ 6:02am

By reading this comment
you are hereby obligated to pay me one million Euro (1,000,000 Euro), and you waiver your rights to sue me in court.
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Lawyer Lance (profile), 8 Jan 2010 @ 6:05am

I think any internet user savvy enough to hire a referral company via the web understands that there are terms and conditions. In this case every page she viewed on the site had a link to the terms, and the final click even stated she agreed to the terms and conditions. As the original article stated, this decision is based on the reality of people's use of the internet. The true measure of enforcability in these situations should be the reasonable availability of the terms to the user. What is the difference between posting the terms on a page with an 'accept' button and saying 'accepting is agreeing to the terms linked HERE'?
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- Marcel de Jong (profile), 8 Jan 2010 @ 6:56am
  
  Re:
  For the sake of argument. You have an interview for a new job, and your new boss tells you "okay, you got the job. Now normally you know that there is a contract that you need to sign etc. But let's just say that there is that contract, and by wanting to work here, you implicitly agreed to that contract. Welcome aboard." *shakes hands*
  At what point would you run out of that office screaming?
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  - IshmaelDS (profile), 8 Jan 2010 @ 1:40pm
    
    Re: Re:
    I wouldn't run screaming, i'd just reply "sure, you accept my terms then." and shake his hand, that way I have determined my own special terms to the contract.
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Tom The Toe, 8 Jan 2010 @ 6:06am

Leading to New Lending Terms
The bank loan officer says, "the terms of this loan are located in my left jacket pocket if you care to see them".
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senshikaze (profile), 8 Jan 2010 @ 6:37am

the problem is, you are almost always allowed to backtrack. If you can back out of an agreement, then i don't see how it is wrong.
now i do agree with slacker52600 above, how can they possibly be allowed to change the terms of service without notifying the user? I know in MMORPG's, if there is a term of service change, they always post it before you log in after the update. I think all companies that change their terms should be force to do this.
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Liquid (profile), 8 Jan 2010 @ 7:06am

Shady
It's not the companies responsibility to make you read the terms of service, or EULA of a service or product. Saying that companies should be forced to do is just laziness. It's your responsibility to read the terms of what ever you are doing before you agree to them. If that means you have to click a link, and be directed to another page so be it. It was put there for a reason. Problem is 99% of all people are in to much of a hurry to read them, and when they get hit by its effects when they do something that breaks that agreement they get all pissy.

Don't be lazy.
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- Marcel de Jong (profile), 8 Jan 2010 @ 7:22am
  
  Re: Shady
  Ever looked at the shrink-wrap licenses on software? You agree to them before you're even able to read them, as they are inside the box, but you agree to them when you buy the software.
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  - Liquid (profile), 8 Jan 2010 @ 7:50am
    
    Re: Re: Shady
    That is different that what is talked about in the story. In the case of that when you purchase something, and you can't read the EULA, or Service Agreement then obviously no it shouldn't be enforced. To think so would be asinine. No one in their right minds would agree to something they don't know about. Wait that's not correct. People buy stuff, and agree to things every day with out knowing exactly what they are agreeing to...
    
    In the case of the story above if you have the chance to click a link to read a sites terms of service, or a software EULA before you agree then you need to read them plain and simple.
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    - Marcel de Jong (profile), 8 Jan 2010 @ 5:24pm
      
      Re: Re: Re: Shady
      BUT THE LAWYER-SPEAK AND THE CONSTANT CAPITALISATION OF THE LETTERS KINDA MAKE IT HARD TO DO.
      
      I understand it's done to prevent the I to be read as an l or something, but it's just not friendly on the eyes, and if you want people to really read and understand the EULA don't make it fifteen pages long. Just keep it simple and set the rules and benefits in clear plain vanilla text.
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The Anti-Mike (profile), 8 Jan 2010 @ 7:22am

I think that the two courts that found them enforceable got it right. In part, I think they realize that there are few real alternatives that would be practical.

Can you image every time you visit a new website, you are forced off to a terms and conditions page,with a check box next to each item, that requires you to specifically acknowledge each item in the T&C? That certainly isn't practical, now is it? We would spend more time online clicking terms, and almost no time actually enjoying the content.

What other choices really exist?
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- Bjorn, 8 Jan 2010 @ 7:56am
  
  Re:
  > What other choices really exist?
  
  Sensible terms?
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- btr1701 (profile), 8 Jan 2010 @ 9:44am
  
  Re:
  > I think they realize that there are few real alternatives that would
  > be practical.
  
  The fact that current contract law is inconvenient, doesn't mean it's invalid. You don't throw out a thousand years of statutory and traditional common law merely because following its principles becomes difficult for the big company on the internet.
  
  Your argument is similar to the one the police constantly make regarding the Constitution's protections: it's too difficult for us to do our jobs if we have to constantly worry about people's rights.
  
  Well, too bad. Find another line of work if you can't live by the rules. Same is true with these businesses. If they can't abide by the standards of contract law that we've had for centuries, then they should go find some other way of making a buck.
  
  We have to get away from this notion that just because something is done on the internet, all the rules change.
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- senshikaze (profile), 8 Jan 2010 @ 10:25am
  
  Re:
  agree, but there should always be a place to SEE those terms, and if the terms change,that needs to be brought to the attention of the user.
  
  One reason I use open source software is, as long as the maintainer doesn't change the license he/she uses, I know my rights at all times.
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- Anonymous Coward, 8 Jan 2010 @ 12:12pm
  
  Re:
  A contract is only enforceable if both parties agree to it. If one side of the party never agreed to any such terms, there is no contract to enforce.
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Jack in Ohio, 8 Jan 2010 @ 7:35am

So these clicks of an agreement constitute a contract? Most of the people clicking them are probably kids under 18 which makes them voidable as minors are unable to enter into contracts. How the heck can this work legally?
Is the Judge, Judges getting a kickback?
There is always real mail and postal service and Notary Public's where this could be legal and binding.
www.techdirt.com
Click that link and your soul is mine!!
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Peter (profile), 8 Jan 2010 @ 9:27am

what is and isn't enforceable online
I think what's notable about this new case is that the user could not complete the transaction without seeing a notice that if she completed it she would be bound to the terms and conditions that were available with the click of a button. Thus, this case is no different than when you rent a car and don't read the rental contract before you sign -- you're still bound. You have a "duty to read" -- you can't get out of a contract's terms if you've expressed agreement to a contract but not read it. In contrast, in the Specht case (which the user was trying to rely on), the most important fact was that the user could have downloaded software without knowing that in doing so he or she was entering into a contractual relationship (because the notice that the user was doing so was so far down on the page that he or she would have had to scroll down to even see it, and it's perfectly reasonable to believe the user would not do that and that the user would believe he or she was getting the downloaded program for free). Thus, the court in that case held that there was no contract. It wasn't merely that the user did not read the terms and conditions; the user had reason to believe there was no contract.

As to whether a unilateral right to change the terms of a contract is something a court will enforce, there is very little case law as yet, but at least one federal court has held that under California law those provisions are NOT enforceable. See http://www.karlbayer.com/blog/?p=3940
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Brendan (profile), 8 Jan 2010 @ 12:00pm

My Terms of Dealing
I've always meant to write up some "Terms and Conditions" of my own, which applies to all vendors who accept my business. I'll include a link to these terms in my online order notes.

Generally, they will grant me reasonable rights such as returns with paid shipping, satisfaction guarantees, a decent warranty, etc. Nothing too out of line.

They can click and read them before accepting my sale, if they want. I would say my terms are just as valid as their own terms (will mine be explicitly supercede where there is a conflict).

Oh, and I get a night with their daughter(s).
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Anonymous Coward, 9 Jan 2010 @ 3:36am

mike's sensationalist bullshit strikes again
If any of you read the case (or even just the article), you'd realize that in mike's typical sensational bullshit streak, he left off was that this is not one of those stupid "terms of service" that are merely linked to at the bottom of the page.

This lady used an independent contractor search service, and before you use it, you have to fill out a form describing what type of contractor you need, and affirmatively click the submit button right next to the note that says something like "By clicking submit, I accept these terms and conditions" (and it has a link to the T&C). There is no logical reason why that should not be sufficient action to create a contract. She affirmatively clicked the button saying she agrees to those terms.

The bullshit that no court has upheld (and rightfully so) is the T&C link they put at the bottom of every page. In these kinds of cases, the site owner is arguing that you agreed to the terms by merely accessing the site. Rational people have a problem with this because it's a catch 22 -- you can't view the terms (or find out where they are) without having accessed the site, yet the terms are saying that by accessing the site, you agreed to the terms. That is your standard "By reading this, you agree to pay me $1 trillion billion fafillion jajillion dollars" that gets everyone so pissed off, and mike just happens to neglect to mention that this is the reasonable and normal case, while presenting it as the one that pisses everyone off.

Congratulations, mike again goes down as a sensationalist douche.
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