What You Need to Know Before Visiting a Website

ArbitrationAlmost every website contains “Terms of Service,” theoretically regulating the conditions for using the website.

Any online software sale — whether the software is “Software as a Service” (SaaS) or downloaded to the user’s computer — typically contains terms of use.

Different ways of acknowledging these agreements have different legal ramifications. Here’s a brief primer.

Browserwrap

A website’s “Terms of Service” page typically includes a statement that using the website means you’ve accepted the conditions posted in the Terms of Service.

If the terms are on the website, but you don’t have to take any action to acknowledge them — such as clicking a button or checking a box — the terms might be unenforceable in court.

In a 2012 case involving Barnes and Noble, the Ninth Circuit Court of Appeals held that simply having a hyperlink to the terms on every page on a website was not enough. In its ruling the court said,

Given the breadth of the range of technological savvy of online purchasers, consumers cannot be expected to ferret out hyperlinks to terms and conditions to which they have no reason to suspect they will be bound.

Clickwrap

The questionable enforceability of “browserwrap” is why some websites make sure users acknowledge being bound by the terms with some kind of affirmative action, such as clicking a button or checking a box.

Courts have found that the “click” doesn’t even have to be explicitly on a page displaying the terms. For example, Facebook’s signup page includes a hyperlink to the company’s Terms of Service, with a notice that reads:

By clicking Sign Up, you are indicating that you have read and agree to the Terms of Service.

Courts have found this to be sufficient notice to bind users to the terms of the agreement.

Mix and Match

A recent case presents a hybrid situation.

In Holdbrook Pediatric Dental, LLC, v. Pro Computer Service, LLC, a New Jersey court found that including a hyperlink to an arbitration clause in a contract that had to be physically signed was not enforceable.

Once the contract was printed out for signature, the hyperlink appeared in a garbled form, and of course the person signing would not be able to go directly from the document to be signed to arbitration clause. For this and other reasons specific to the case, the court ruled that the clause in question could not be considered to have been agreed to by the other party.

Arbitration Clauses

As the New York Times has reported, arbitration clauses in consumer agreements are under scrutiny these days.

In February, Senators Al Franken and Patrick Leahy introduced a bill that would strictly limit the use of arbitration in some contracts.

The law would apply to civil rights cases, employment disputes, and other “crucial lawsuits.”

Lesson

Even though the average user will not read pages of fine print before clicking a button that says “I have read and agree to the terms of service,” by clicking that button the user is bound to the terms.

If you want to enhance the chance of your terms of use being enforced, make sure the terms are easy for the user to find. Trying to “hide” terms users might not like is a bad idea — courts are more likely to find them unenforceable.  

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