In the age of "one click" shopping, sellers of products and services must often utilize new business tools with a certain degree of legal murkiness. Adapting shrinkwrap agreements to the delivery of digital products—which are never literally "unwrapped"— or providing terms and conditions by email after a party has bought the product can each present problems when a seller later tries to enforce those terms.
A recent federal circuit court faced this issue and refused to enforce the seller's emailed terms and conditions. The company, Great Fun, offered consumers membership in a program by which they could receive discounts on various goods and services in exchange for a monthly fee. Several consumers claiming ignorance of having ever signed up for the program brought a class action suit against Great Fun. When the discount company sought to enforce the arbitration clause in its terms and conditions—which it had emailed to these consumers—the Second Circuit Court of Appeals refused to enforce it.
The Second Circuit, in Schnabel v. Trilegiant Corporation, applied the concept of "shrinkwrap agreements" to the digital context. In a traditional sale, the product's exterior package has only basic information, such as the price, while the consumer must open the package to read the terms and conditions. These terms and conditions are enforceable, as the consumer is free to return the product if he or she does not want to agree to the terms. The use of the product is considered acceptance of the terms.
However, when terms and conditions are emailed at some point after the sale, a seller cannot assume that the consumer has actually seen these terms, let alone read them or accepted them. Absent an affirmative step, the consumer cannot be presumed to have even opened the email. The Trilegiant court did offer a potential solution: either require the consumer to affirmatively "accept" the emailed terms, or have the consumer click a box on the webpage accepting the terms at the time of purchase.
Emailing terms and conditions may be a more consumer-friendly way to handle sales, particularly in the "one click" shopping age. However, if you plan to ever enforce those terms, make sure the customer clicks again accepting the terms.