Are Website Terms and Conditions Legally Binding?
Are website terms and conditions legally binding? Yes, if they meet the elements that create a legally binding contract and how the terms are given to the user.3 min read
2. Terms of Service Clauses
Updated October 30, 2020:
Are website terms and conditions legally binding? Yes, if they meet the elements that create a legally binding contract and how the terms are presented to the user for review and acceptance on the website.
Terms of Service are the terms and conditions users consent to before using or purchasing goods or services on a website. When the user agrees to the Terms of Service, a contract is created between the user and company. For the contract to be legally binding, the presentation and acceptance must meet approved standards.
Two approaches that can be taken by website owners to present the Terms of Service properly include:
- Browsewrap agreements- These display a notice on the website that if the user proceeds to use the website, they agree to the terms and conditions. Browsewrap agreements do not include a button the user must press to move forward.
- Clickwrap agreements- These require the user to click to accept the terms and conditions before using the website. This type of legal agreement uses an agree button or similar phrasing.
Determining if Terms of Service Are Enforceable
Setting up enforceable Terms of Service requires specific placement, explanations and proper record keeping including:
- Proper and obvious notification to users that the Terms of Service exist.
- Legal agreements should not be buried in the website footer. Courts have found this to be insufficient, and the terms are not considered legally binding.
- Clickwraps that are too simple are not enforceable. The user must receive an obvious notification that the Terms of Service exist and use of the website confirms the user agrees to these terms. The user must click a button or check a box. This action helps confirm the user's agreement of the terms.
- Browsewraps may be easier for the user to use the website, proving acceptance is harder due to lack of an action like clicking a button or checking a box.
- Tracking Terms of Service agreements can be difficult as it must be continually updated to reflect updated versions, dates and acceptance data.
If the Terms of Service agreement includes a unilateral provision which states the company can change the agreement without notifying the customers, the agreement is entirely unenforceable. There have been many cases involving large corporations that have confirmed that unilateral provisions are not enforceable including Blockbuster Inc, Talk America, Inc., and Safeway Inc. Any changes to the terms must be relayed to the customer to be legal. A grace period may be included in the terms to let customers know changes may be made. In 2012, Zappos had their entire terms of service voided by the court because it used a browsewrap agreement, that does not require the user to click or check to accept and because a unilateral provision was part of the terms.
Terms of Service Clauses
Users should note that the terms included may not be in their best interest. This includes:
- Arbitration clauses that stipulate any legal issues must be settled through arbitration companies. Arbitration companies are privately run and rule in favor of corporations. An attempt was made to limit arbitration clauses by The Consumer Financial Protection Bureau, but was not approved by the Senate.
- Clauses that give companies the ability to collect, store, and share the personal data of the user. This results in data breaches from companies who do not have the proper security in place to protect sensitive data. This has increased the need for identity theft protection.
- Personal data terms attempt to give the company ownership of your content. Instagram included a provision that allowed them to sell the users photos for advertisements without notification or payment to the user. While the clause was legally allowed, Instagram pulled the clause due to intense public outrage.
Terms of Service are enforceable in civil and criminal court. Under the 1986 Computer Fraud and Abuse Act (CFAA) accessing a computer without proper authorization or in a way that exceeds authorization is a federal crime. The CFAA is vague and has been used to prove federal law violations, not just violations of the Terms of Service agreements. In 2013, Aaron Swartz was prosecuted by the federal government for copying files from JSTOR, a digital academic library. Although Swartz violated the terms, JSTOR did not press any charges. This has put CFAA under scrutiny.
If you need help with understanding if website terms and conditions are legally binding, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.