Friday, September 14, 2007

Browse-wrap agreements boosted by US ruling

(via Out-Law) Browse-wrap agreements have received yet another boost in the United States in the case of Cohn v Truebeginnings. The California Court of Appeals has ruled in favour of the defendants in a case of contract formation via terms of use.

Michael Cohn sued dating website in December 2005 alleging sexual discrimination against males in the site, as it provided special offers for females such as lifetime subscription to email and chat services in the site. The defendants moved to dismiss on the grounds of inadequate forum, as their terms and conditions clearly contained a jurisdiction clause that stated all litigation would take place in Texas; the case was dismissed on those grounds. Cohn appealed, arguing that he had never agreed to enter into a contract with, as their terms and conditions did not constitute a valid agreement.

The reason why this case is important in the history of electronic contract formation is that it is a click-wrap and browse-wrap hybrid. In a typical click-wrap agreement, the parties are given the terms an conditions upfront, and then have to click "I agree" or a similar button. In browse-wrap agreements, the terms and conditions are not presented in the same page, and are usually available through a link. I say that this case is a hybrid because's terms and conditions had bot elements. When a new customer signed up, he would be presented with the following message:

I am 18-years-old and I have read and agree to the TRUE
Terms of Use and Code of Ethics.
The customer would express his acceptance of the terms of service by clicking on the Continue link. However, the terms and conditions were never presented upfront. I can think of at least a dozen e-commerce sites on both sides of the Atlantic that contain similar contract formation formats.

The Californian Court of Appeal agreed with that this was a proper incorporation of terms. They say:
"Respondents presented substantial evidence that appellant had to click on the “continue” button in order to register for his trial membership on the Web site, and that doing so constituted an agreement to the “Terms of Use” on the Web site. Appellant may not have read the “Terms of Use,” but they were readily available to him on the Web site if he clicked on the “Terms of Use” link near the “Continue” button. Under these circumstances, where appellant obviously had access to the Internet and was entering into a contract on the Internet, there was nothing inherently unfair in requiring him to access contractual terms via hyperlink, which is a common practice in Internet businesses."
I have to say that the ruling seems very logical and fair, but I'm encouraged by the result because Mr Cohn does not sound particularly nice. I mean, what kind of person goes to a match-making website and gets angry about the preferential treatment given to women? Successful dating sites rely of the availability of females, so the promotions seem to make perfect marketing sense. But more worryingly, is chivalrous behaviour completely dead? I'm guessing Mr Cohen may have been angry about something else, and not particularly by the terms and conditions encountered.

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