The Safeway Grocery store chain recently learned a valuable lesson about changing online terms and conditions. Those terms aren’t binding on customers who do not receive notice of the changes. That’s the recent ruling from a California based federal court.

A Safeway customer named Michael Rodman brought a class action complaint against Safeway. Rodman claimed Safeway raised prices at its physical stores.

Safeway argued the price hike was set out in amended online terms. Safeway essentially argued it's arbitrary decision to change the deal terms was all that was needed to effect those changes. In Safeway's view, the fact that Safeway customers weren't aware of the changes didn't matter. Safeway based this argument on a notice appearing on its Web site stating that users agreed to whatever terms appeared on the Web site at the time customers made the purchases.

The court, however, disagreed. It noted first that customers could not agree in advance to future unknown terms. It also noted that "settled law" required Web site operators to give advance notice of charges "to put users on notice of the terms to which they wish to bind consumers."

As a result, the court ruled the amendment was not effective in the absence of evidence that Safeway gave customers advance notice of the changes. It is like the proverbial tree falling in an empty forest—the change is ineffective if no one hears about it.

Special thanks to SWEL student, Kathryn Macon, for her assistance on this edition.