A website’s Terms and Conditions (TOC) is at its root a contract and old-fashioned contract law applies to it. All contracts require: an offer to be made, acceptance of the offer, and consideration (an exchange of value). All three of these elements are required for the contract to be enforceable in court and for it to protect your company. In a digital environment, the offer is clearly the Terms and Conditions itself, which explains what the Website or App is all about and what Users can expect by using it. “Consideration” here can be a little more conceptually evasive, but it is generally considered to be the value the Website or App provides to the User.
Your Users Need to Properly Accept the Contract
The requirement of “Acceptance” is the crucial issue which business owners and website managers should keep in mind – if a Court is not satisfied that a user properly “accepted” the TOC, there is legally no contract at all. As such, it’s essential to ensure that your TOC is properly accepted by users, and the same applies for amendments to your TOC as well.
The 2011 British Columbia case of Century 21 v Rogers Inc. (BCSC 1196) is really illustrative here, and provides solid guidance on how to properly ensure your company’s TOC will hold up in Court. To state the facts briefly, the Defendant copied content from Century 21’s brokerage website, in violation of the Century 21’s TOC. The main issue for the Court to decide was whether the TOC was enforceable since users of the Website were not required to confirm their acceptance of the TOC by any mechanism. The Court found that there was a contract since the Defendant proceeded further into the Website, thereby implying acceptance of the TOC.
In order to avoid getting into a similar lawsuit, companies need to take proper precautions to ensure their TOCs are valid contracts. There are a couple ways you can effectively do this.
1: Click-Wrap Agreements – Have the User Click “I Agree”
Having a pop-up appear on the Website for users who first access it, or for continuing Users when there is an update made to the TOC, that requires them to take notice of the TOC and click “I Agree” is an effective way to avoid any issues regarding the enforceability of your Company’s TOC. Again, it’s important to have users do the same when there is an update to your Company’s TOC, as updated contracts also need to follow the same three rules of Contract Law to ensure they apply.
2. Browse-Wrap Agreements – Make your users aware of the Contract
A browse-wrap agreement doesn’t require a user clicking “I Agree”. Instead, all that is required is that they continue to use the Website or App after they have been made aware of the Website’s TOC. The issue to watch out for here, is to make sure that your users have sufficient awareness of the TOC, as well as any updates to it. As the Court in Century 21 v Rogers stated, the analysis “turns on the prominence the site gives to the proposed Terms of Use and the notice that the user has respecting what they are agreeing to (para 108).” Effectively making your users aware of the TOC will depend on the layout of your website or app, but your safest bet would be to feature notice of the Terms and Conditions in clear font, in the view of a user who first comes into contact with your site (e.g, near the top of your homepage).
3. Scroll-through Agreements – Have your users scroll through the contract and click “I accept”
This method is becoming more common, and its clear why. It requires a user to scroll through the entire Terms and Conditions, and confirm acceptance at the end. The idea here is that there can be no doubt that the User has been made aware of the contract, in all its length and complexity, and they are nonetheless accepting it. This is the safest method to ensure your company’s TOC is enforceable, but it may not always be the most appealing from a user-experience perspective. Nonetheless, it is the best way to ensure all the work that went in to your TOC ends up being useful in case you go to court.
Ultimately, the method that makes sense for you and your company
will always vary, and its always best to consult a lawyer before drawing up
your website’s Terms and Conditions. Omnia Law has experience in drafting
meticulous and effective Terms and Conditions and Privacy Policies. Contact the
firm for a free consultation to learn about how the firm can draft Terms and
Conditions which effectively protect your company.