Putting Revised Contract Terms on Website

Hooray !

I learn from Euclid Managers Insurance Blogthat the U.S. Court of Appeals for the Ninth Circuit (it covers California) has confirmed that the answer to the question of whether a service provider may change the terms of its service contract by merely posting a revised contract on its website is NO. Let me repeat that: NO.

This result, I would have thought, is the only one consistent with established principles of contract law (which do not differ across the English-speaking world), but as always some clients can find lawyers to agree to defy logic on their behalf.

The Ninth Circuit inter alia noted that the customer:

... could only have learned of the new contract terms by going to the company’s website and examining the contract for changes. Without notice, a party wouldn’t know when to check a website and might have to do it as often as daily. And a person would have to compare every word of the original contract with the posted contract in a search for changes

Then the court addressed concepts of contract law: parties to a contract are not obligated to check the terms to learn whether they have been changed by the other side. A party can’t by itself change the terms of an agreement; it must first obtain the other party’s consent. A “revised contract” put forth by one party is nothing more than an offer that is not binding until accepted by the other party. And generally an offeree cannot actually consent to an offer unless he knows it exists....

The growing use of websites to disseminate information and terms to customers and visitors, whether through pages addressing Privacy and Terms of Use or through click-through agreements, may lead some parties to go too far. Specifically, website owners may place too much faith in protection that is perceived to be afforded by simply placing information and/or changed terms on their website and pay too little attention to fundamental contract principles.

The above quotations are extracted from T. R. Franklin's article on Euclid Managers Insurance Blog, which I encourage you to read and, indeed, to which a subscription would be a good idea.

Sending Legal Notices By E-mail

As one might expect, given that its business was internet betting, Sporting Options plc dealt with its customers exclusively by e-mail. When the business failed, the liquidators suggested that it should be OK to send formal notices to those customers by e-mail only. However, the necessary court sanction was not forthcoming.

Is this a case of old-fashioned judges not being cognisant of the realities of the "New Digital Age" ? No, actually it is an example of the limits there are to the efficacy of the new technology. (Are you paying attention, Bertie Ahern ?)

The evidence showed that some attempts by the company at e-mail communication had been sent back and others had been blocked.  Furthermore, although the assumption had been that all customers who placed bets via the internet would have internet access, that did not mean that those customers would retain the same e-mail addresses or would access those addresses regularly for retrieval of emails.

The case is reported in [2004] All ER (D) 30. It is not available on the internet (!). (You will find details on it by Googling, though).