Brian Chau is a JD Candidate at Osgoode Hall
The Action
On December 23, 2009, the Missouri Court of Appeals issued a ruling on browsewrap that essentially reinforced that the traditional principles of contract law apply to the internet. In this case, the plaintiff, Ms. Major used the defendant’s online contractor match-up service, ServiceMagic, and sought to initiate a tort action against the contractors, including ServiceMagic as a defendant. The website contained a link to the website’s terms and conditions that included a forum selection clause, and the defendant sought to dismiss the case on those grounds.
Why is this important?
This case deals with how websites are able to communicate their legal intentions and corresponding obligations to the users of the website. The internet provides a practical challenge to the interpretation of contracts. In contrast with ‘clickwrap’, where a user expressly clicks an ‘I agree’ button or similar provision, this website used ‘browsewrap’, where the legal text is simply stated on the page. A key problem with browsewrap is that it is often difficult to ascertain whether, from a traditional contract perspective, the user has actually assented to the terms and gave proper consideration. In Specht v. Netscape; the United States Court of Appeals, Second Circuit, found that in that case, the browsewrap wasn’t enforceable, noting that the references to the terms and conditions weren’t easily accessible to the user.
Understanding that the provisions of browsewrap can lead to users being easily manipulated by website owners, the courts have generally given the benefit of the doubt to users. Per this rationale, Ms. Major is seeking to deny assenting to the forum selection clause, claiming that the notice of website terms was inadequate and no "click" was required to accept them.
However, the courts must also balance the rights of the website owners to stipulate terms without going through the hassle of clogging up their customer experience with ‘I agree’ steps. The Missouri Court of Appeals takes an approach that sets out factors for consideration in understanding where the terms stipulated by ‘browsewrap’ should be enforced by law.
The Decision
The Missouri Court of Appeals took, in my opinion, a very fair approach to the facts of this case. In their well-written judgement, the Court decides to uphold the forum selection clause unless it is ‘unfair or unreasonable to do so’, noting that the party resisting the clause bears a heavy burden to show why it should not be held to its bargain.
The court took the traditional contract view that the failure to read an enforceable contract does not excuse compliance from its terms. As such, the plaintiff’s arguments were struck down as the court found that ServiceMagic did give ‘immediate visible notice’ and that the website terms were not so inconspicuous that a reasonably prudent internet would not have known about their existence. In a concurring judgement, Conklin J also cautions that this decision is not a blanket assent to the use of ‘browsewrap’ in all situations to cover buried terms. This appears to be a well-reasoned decision that takes into consideration the practical realities of the internet, balancing the needs of both the owners and users of a website by requiring that terms must be communicated in a clear and reasonable fashion.