Browsewrap agreements are the most common contracts used online. You usually see them in the form of terms of service used for websites. Given this, it is a pity most browsewrap agreements are unenforceable, and the site owners are none the wiser until it is too late.
To understand the problem with these agreements, it is first important to comprehend their purpose. The purpose is to create a contractual relationship between the site visitor and the site owner.
A contract is only binding if the parties meet a number of requirements. “Acceptance” is the pivotal element. Specifically, each party must give a sign of acceptance of the contract to the other. If this does not occur, the contract is not binding on the parties.
A browsewrap agreement uses a passive form of acceptance. A site visitor is not required to act affirmatively to indicate their approval. Instead, the agreement will include some sweeping statement along the lines of “you agree to these terms if you keep using the site.” The question then becomes is having this statement published on a page nobody reads enough to bind a user?
As a general rule, courts are very unhappy with the passive agreement approach. Why? Well, let’s consider other examples to see how dangerous the approach can be.
Do you get credit card offers in the mail? I do. Let’s assume I get one this morning. The proposed interest rate is 30 percent. The offer includes a browsewrap agreement on the back of the marketing material that says I automatically accept the terms of the credit card if I fail to contact the credit card company to reject the claim. Seem a bit much?
How about another example? Let’s assume I need to buy a car. I visit a used car lot. There is a sign with small print in the office indicating I agree to purchase a car if I walk onto the lot and look at the cars.
These examples may seem ludicrous, but they reflect real world examples of how a browsewrap agreement works. You can also see why judges might be a tad uncomfortable enforcing such agreements against website users.
If you haven’t fallen asleep by now, you might be wondering about sites where a click-wrap approach is not possible. A blog, for example. There is no “funnel” on a blog that can be used to force a user to accept the terms of the site. We have a conundrum.
More than a few legal experts will present you with sophisticated, elegant solutions to the problem. The truth is there is no optimal solution. The best one can hope for is to create a scenario where “constructive notice” of the terms can be asserted.
How do you create constructive notice? You take steps to make it readily apparent to any user that there are terms, and the user agrees to them. This task is accomplished by sticking the notice of terms above the fold and in the virtual face of the user when they first visit the site.
It is going to be difficult for any visitor to Gigaom to argue they did not have constructive notice of the terms when using the site. After all, the bloody things are right there in their face. If a judge does not find this form of browsewrap agreement to be valid, then the entire concept is pretty much dead.
Browsewrap agreements are generally unenforceable for a website. You should avoid using them at all cost. Unfortunately, many sites have no choice but to use the browsewrap approach. If you fall into this category, contact me to discuss different constructive notice approaches that might prove effective for your site.
Richard A. Chapo, Esq.