Your Terms Of Use May Already Be Dead

By Robert Hawn

Working with technology start-ups in the San Francisco Bay Area, I am often asked to review websites to make sure that appropriate mechanisms are in place to protect the company that is operating the site. One area that I typically look at is the terms that govern the use of the site. These "Terms of Use", as they are often called, can be relatively simple, as in the case of a brochure site, or complex, as in the case of an e-commerce or social media site.

You can usually find these terms if you scroll down to the bottom of the home page of the site, and look for a hyperlink that says something like "Terms" or "Terms of Use." Once you click on the link, you will be sent to a page that describes a user's rights regarding the site. There is usually language that says that by using the site, the user is agreeing to the terms.

This process of providing notice to a site user of the terms that govern the site, and stating that the site user is subject to these terms by using the site, is a way of forming a contract between the site operator and the user. Essentially, the link provides notice to the end user that using the site is subject to certain terms. This approach is really quite elegant, because it allows the site operator to impose all sorts of terms without cluttering up the site. It's no surprise that the hyperlink approach is ubiquitous.

The only problem with it is that it doesn't work.

In August 2014, the Ninth Circuit Court of Appeals, which governs California, Nevada, and many of the western coastal states, held that a link to Terms of Use at the bottom of a webpage is insufficient to impose those terms on users. As a result, the terms can't be enforced against a user. The court in this case held that "where a website makes its terms of use available via a conspicuous hyperlink on every page of the website but otherwise provides no notice to users nor prompts them to take any affirmative action to demonstrate assent, even close proximity of the hyperlink to relevant buttons users must click on - without more – is insufficient to give rise to [an enforceable agreement]."

What the court is saying is that the standard practice of providing a link to website terms at the bottom of a webpage is useless. You just can't create an enforceable contract that way. Having said that, the court is a bit unclear on what you have to do. It does provide a clue, however, when it says that you need to prompt a user to take an "affirmative action to demonstrate assent."

The bottom line here is that if your website uses the standard method of providing a link to its terms of use at the bottom of the website's homepage, the terms of use are likely unenforceable. Contact an attorney experienced in this area of law to examine your website to determine how your Terms of Use can be changed to have a better chance of being enforced.

This is a blog and not legal advice or opinion. Neither I nor my firm provide advice or opinion except following a formal engagement and then only regarding specific factual situations.

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