About us. Privacy policy. Terms of use. Contact us. Most Internet users are familiar with these words - they see them every day in the footer of almost every webpage that they visit. And most Internet users would understand that these words link to important information about the website that we’re viewing. But would they also understand that they can impose binding legal obligations upon them as they surf the Internet? Really? Can that be right?
Although the enforceability of website terms of use has not been judicially considered in Australia, in principle it is entirely possible that the “Terms of use” link on a website, and the terms that can be accessed using that link, will have the effect of creating a binding legal contract between the website operator and end users browsing on the website (even if the end user has taken no specific action to acknowledge the terms of use, such as by clicking on an “I accept” or “I agree” button). Such contracts are commonly known as “browsewrap” contracts.
In this article, we explore some of the issues surrounding the enforceability of browsewrap contracts and set out the practical considerations that website operators should bear in mind if they wish for their “Terms of use” to be enforceable as a browsewrap contract.
General rules of notice and acceptance
Starting from first principles, a contract can only come into being if both parties (1) are aware of and (2) have accepted the terms of the contract.
Provided the parties are made aware of the contract terms, it does not matter if they have actually read the terms. A sufficient level of awareness can established where a party has actual knowledge of the contract terms (i.e. where it is possible to show that the party was actually given a copy of the terms) or where they have been given reasonable notice of the terms (i.e. where it can be said that the other party has done all that was reasonably necessary to bring the terms to their attention at the time of contracting).
An example of the reasonable notice requirement is the case of eBay International AG v Creative Festival Entertainment Pty Limited, where the Federal Court found that purchasers of Big Day Out concert tickets through Ticketmaster’s website were not given adequate notice at the time of their purchase of a condition printed on the back of the tickets which prohibited them from reselling the tickets for profit. The court found that a vague reference in Ticketmaster’s website purchaser policy that purported to incorporate additional terms on the tickets was not enough to bind the purchasers, as they could not actually view those terms until the tickets were printed and delivered, which could be more than six weeks after the transaction was concluded. Translating this dilemma to browsewrap contracting, what steps does a website operator have to take in order to give end users sufficient notice of their website terms of use? Is providing a link in the footer of the website sufficient? These are difficult questions to answer and there are no hard and fast rules. However, we have described in the next section below some practical steps that website operators can take to put themselves in the best position to argue that they have given sufficient notice.
The second key challenge with browsewrap contracting lies in demonstrating that there has been some acceptance by the end user. After all, the end user isn’t doing anything other than looking at the website in their browser. Can that of itself be sufficient acceptance?
It is certainly clear that a contract can be accepted by conduct - a signature or other written acceptance is not a mandatory requirement. However, for conduct to be sufficient for an acceptance, it must demonstrate that the parties have achieved a meeting of the minds. One way to do this is for one party to specify the conduct that will be taken as a sufficient acceptance by the other party of the contract terms that the first party has proposed. This is essentially what happens with a “clickwrap” contract - in other words, one party says “to accept my contract terms, please click this button” and the other party accepts through the conduct of clicking. It is possible to do something very similar with browsewrap contracts, by specifying that continued use of the website will amount to acceptance. So to improve the chances of website terms of use being enforceable as a browsewrap contract, it is sensible to include an express provision regarding the manner in which acceptance of the terms is to take place. For example:
- “these terms govern your use of the website”; and
- “if you do not agree to these terms, you should immediately discontinue using this website”.
Care should be taken in using a statement such as “by using this website, you indicate your unqualified assent to be bound by its terms” as we understand that the ACCC may consider such terms to be unfair under consumer protection legislation.
Practical considerations for giving notice of browsewrap terms
As we mentioned above, one of the current unknown factors for browsewrap contracts is the manner in which they should be presented or notified to end users in order to ensure they are enforceable. Since there has been no judicial consideration of this issue in Australia, it is difficult to come up with definitive guidelines. However, the following are some practical considerations that website operators should bear in mind.
(1) Make the words speak louder
Website operators should ensure that any links to their terms of use are made as conspicuous as possible. In Specht v Netscape Communications Corp., the US courts rejected a browsewrap agreement for a software download where the terms of use were only accessible if the purchaser scrolled down the page. The court said that the terms of use were not sufficiently prominent, because there was no reason for the purchaser to scroll down the page as they could access and download the software without doing so.
In order to avoid problems such as the ones identified in Specht, website operators should consider displaying the link to their website terms of use:
- in a prominent position on the website that can be viewed by the user without having to scroll through the website;
- in a position where users usually expect to see such terms (for example, it is common practice for websites to display their terms of use in a common footer on all pages on their website and it is sensible for website operators to follow this convention);
- in a relatively large font and in a contrasting colour to other hyperlinks and the background of the website; and
- in conjunction with additional text or images that would direct the user’s eye to the hyperlink.
(2) Be comprehensive
There are many ways in which an end user may happen across a website - they may type the URL of the homepage directly into their browser, or they may click on a deep-link that is displayed on another website, or they may be directed to the website by a search engine.
In order to make sure that website terms of use are binding on all end users, irrespective of how they enter the website, it is important that the link to the terms of use is displayed on each page of the website and not only on the website homepage. That way the terms of use may be binding on all end users, even if they have by-passed the homepage on their way into the website.
One popular way to do this is to ensure that each page of the website has a common footer that displays important information, such as the website terms of use, that applies to the website as a whole.
(3) Keep it real
The level of notice that has to be given for different contract terms is not necessarily equal. Terms that may be considered to be “unusual” or particularly “destructive” of an end user’s rights may need to be displayed more prominently if they are to be enforced.
This does not mean that website operators should slavishly copy industry practice such that the terms of use of every website are identical - it is still legitimate for website operators to tailor their terms of use to their own specific purposes. However, it is likely that the courts will look more favourably on terms that are generally reflective of industry norms. By contrast, terms that depart from standard practices in a material way may require special notice if they are to be enforceable.
It is also worth remembering the old adage that “what goes around comes around” and a website operator should be wary of including provisions in its terms of use that it is not happy to comply with in relation to other websites. The Canadian case of Century 21 Canada Limited Partnership v Rogers Communications Inc. serves as a good reminder of this. In that case, the court was less inclined to find that the user of a website did not have reasonable notice of the terms of use that applied to that website because the user themselves operated a website that was subject to similar terms of use. In other words, if you apply certain terms to your own website, you should reasonably expect to be bound by similar terms when you visit other websites and so should not expect to be given special notice of those terms.
(4) Account for changes
As many users may be repeat visitors to a website, it is important that they be notified when the terms of use that apply to the website have changed (otherwise they may reasonably assume that the same terms continue to apply). For this reason, website operators should consider taking the following steps:
- for a reasonable period after their terms of use have been updated, including a statement next to the hyperlink for their terms of use indicating that an update has been recently made (e.g. “Terms of Use - Updated 1/1/2012”). Alternatively, they may want to permanently display a date to indicate currency of the terms of use (e.g. “Terms of Use - Last updated 1/1/2012”); and
- including an express provision in the terms of use stating that the website operator may change the terms from time to time by displaying an updated version on the website and that end users will be deemed to have accepted such changes if they continue to use the website.
