Randazza: Online Businesses Shouldn't Rely on 'Browsewraps'
How many of you have ever read the terms and conditions on websites that you frequent? I often say that drafting online agreements is some of the loneliest work a lawyer can do. Usually, even the webmaster stops reading after a few paragraphs.
A "South Park" episode made a joke out of the fact that very few people read online terms and conditions before agreeing to them. In that episode, as a result of some terms buried in the iTunes terms and conditions, Apple takes certain liberties with Kyle Broflovski. Kyle has his lips sewn to the anus of an Asian man, and his anus, in turn, sewn to the lips of a woman. The episode rises to a comedic crescendo as cuttlefish passes from the digestive tract of the Asian man through Kyle and into the woman and then exits as power for the HumancentiPad.
Recently, the District of Nevada did its part to help us avoid such a fate in In re Zappos.com, Inc., Customer Security Breach Litigation. The opinion lacks any of "South Park"’s theatrics and humor, but should be of far more interest to any readers who do any business online. Since most readers of this article are in the adult industry, that means every one of you should be concerned about this recent order. The order may render arbitration clauses contained within many online terms of service unenforceable. See In Re Zappos.com, Inc., Customer Security Breach Litigation, 3:12-cv-00325, Sept. 27, 2012.
“We reserve the right to change this Site and these terms and conditions at any time. Accessing, browsing or otherwise using the site indicates your agreement to all the terms and conditions in this agreement, so please read this agreement carefully before proceeding.”
Like most states, Nevada requires that contracts must have an offer, acceptance of that offer, a meeting of the minds as to the contract’s terms, and consideration. However, based on the browsewrap agreement before the court, the court could not find that Zappos’ users ever agreed to (or even read) these terms. Therefore, Zappos’ users had entered into a contract with the site. The Nevada court’s decision revisited other court decisions resolving this issue identically nationwide, invalidating provisions in many other online terms of service because the browsewrap agreement was not sufficient to put users on notice of the bargain they putatively entered by using the site.
Essentially, an agreement that binds only one party, while giving the other party the unrestricted right to terminate the agreement, is no agreement at all. Thus, the logic in this case reaches far beyond Nevada.
The author is the managing partner of Randazza Legal Group with offices in Las Vegas, Phoenix and Miami.
(c) Randazza Legal Group 2012.