Wondering if your online contract will hold up? Here's the
good news: online contracts are enforceable in Canada. For a number
of years the courts have shown that they will uphold online
agreements in the same way as written paper agreements signed by
the parties. Contracting parties can show their consent to online
terms by means of a click or even by "implied consent",
as seen in cases such as:
RogersCable Inc., in which the
licensee's conduct of continuing to make use of the service
after receiving notice of certain amendments indicated assent to
the terms of the agreement;
ii.Canadian Real Estate Association v. Sutton
(Québec) Real Estate Services Inc., where
the terms of the agreement;
iii.Century 21 Canada Limited
Partnership v. Rogers Communications Inc., in
which, once again, assent was communicated by the user even in the
knowledge that continued use would indicate assent.
The bad news is that some online
businesses still don't take the necessary steps to ensure their
terms are enforceable.
It's important to remember that, despite this line of
decisions, online contracts are not "guaranteed" to be
enforceable. In the US case Schnabel v. Trilegiant, the
court considered the enforceability of terms that were emailed
after the contract was formed. The court commented:
"The question presented to us
on this appeal is whether the plaintiffs are bound to arbitrate
their dispute with the defendants as a consequence of an
arbitration provision that the defendants assert was part of a
contract between the parties. Neither of the plaintiffs acknowledge
being aware of the existence of the arbitration provision when
their contractual relationships with the defendants were formed.
But, according to the defendants ... an email sent to the
plaintiffs after their enrollment..."
The court concluded that "the
email did not provide sufficient notice to the plaintiffs of the
arbitration provision." In this case, the online terms were
not enforceable, because they were provided to the user
after the formation of the contract, rather than as a
condition of entering into the contract. The practice of emailing
online terms to the user is certainly a good practice, but it
should not take the place of terms that are presented to the user
at the point of contract formation.
Here are several tips for ensuring
enforceability of online terms:
First the user should be provided
with proper notice of the existence of the terms. In other words,
the user should be made aware that terms apply to this transaction,
service, subscription, license, or whatever it is.
Next, the user should be given a
chance to review those terms.
Lastly, the user should be told
that a particular action will indicate consent to those terms
– for example, clicking "I accept", tapping
"Continue", selecting a radio-button or typing a name.
Then the user has to take that action.
Emailing a copy of the terms after
the transaction, or making those terms available for offline
viewing, is recommended. However, the email should confirm what has
already been presented to and accepted by the user.
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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Software license agreements generally require the customer to pay fees for the software license and related services, which fees are usually based upon the duration of the license and the manner in which the customer is allowed to use the software, together with applicable taxes and withholdings.
In less than nine months, on July 1, 2017, persons affected by a contravention of Canada's anti-spam legislation will be able to invoke a private right of action to sue for compensation and potentially substantial statutory damages.
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