More and more businesses are establishing online stores and
forums, and are otherwise seeking to engage with their customers
on-line. On-line activity has legal consequences, so businesses
should take the time to review their website, on-line ordering and
other terms and conditions.
In the context of on-line transactions, the crucial question is
whether your website terms and conditions are enforceable. Merely
placing terms and conditions on a website does not automatically
mean that all users will be bound by them: An additional step must
occur whereby the user agrees to comply with the terms, and a legal
agreement is formed. Broadly speaking, there are two common methods
of achieving this, being:
"click-wrap" systems, where the user must scroll
through the terms and conditions before agreeing to them; and
"browse-wrap" systems, where the user is referred to
terms and conditions by way of a hyperlink link, but is not forced
to click on the link before agreeing to the terms.
There is limited case law and guidance in the area of
"click and accept" website terms and conditions. However,
as a general principal, the website operator must provide
"reasonable notice" of the existence of terms and
conditions before the user accepts (or is deemed to have accepted)
Both the "click wrap" and "browse wrap"
styles are acceptable, and are suitable in different circumstances.
Generally, and indeed historically, the "click wrap"
procedure has been preferred, as the process requires that the user
reads (or at least scrolls through) the terms and conditions before
proceeding. This may result in the terms and conditions being more
easily enforced by the website operator.
In any event, to maximise a website operator's ability to
enforce and rely upon terms and conditions:
the user should be required to accept the terms before using
the website, or performing the relevant act (e.g. establishing the
user account, making the online purchase etc);
the terms and conditions must be conspicuous and easily read
and accessed (e.g. the font size must be reasonable);
users should be able to print the terms and conditions if they
wish to do so; and
the website should make it clear that by clicking on the
"I accept" box, that the user is accepting and will be
bound by, the terms and conditions. For example, the website could
state that, "By ticking the "I accept" box, you
agree to, and will be bound by, the terms and conditions. If you do
not agree to the terms and conditions, you must not use, access,
purchase or download materials from the website or obtain a user
Website operators should also regularly review the content of
their terms and conditions, in order to ensure that they are
accurate, comprehensive, comply with current law, and address all
the risks associated with the current functions of the website.
Of course on-line contracts will probably never have the benefit
of the presumption that a person is deemed to have read and
understood any contract they have signed. And there is usually
little scope for someone to argue that was not their action if they
have signed the document in the presence of a witness. Hence for
major business contracts there are still significant benefits in
having customers sign a written agreement.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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