Click or Not to Click: Online T&Cs and How Not to Get Caught Out
20th October 2020
Highlights
- Phillipa Hooper, Senior Associate, at Active Law takes a look at online terms and conditions, and common catches to be aware of.
- Active Law is also extending discounted workplace relations advice via a 30-minute telephone consultation including an employment law health check for ACS members.
Let’s face it, how many of us have unthinkingly clicked on ‘accept our terms’ on a website or mobile App without actually reading those terms when buying goods or services? Leaving aside that you may have unwittingly signed up to unfair contract terms under the Australian Consumer Law (and we will explore this further in a future eNews), have you actually entered into a legally binding contract? The answer to this question is one of importance to both the user (client or customer) and the retailer or supplier.
Click thru or click wrap agreements
Put simply, a click thru or click wrap agreement requires a user to demonstrate that they have read the online terms & conditions prior to proceeding with their purchase. This is often demonstrated by asking a user to tick a box to confirm they have agreed to the terms & conditions.
Common examples:
1. purchasing goods online – the point of sale being a ‘click on cart’ type purchase
2. registering an account on a social media website
3. downloading or installing software
An example
An example is neatly provided by the NSW Supreme Court decision of Smythe v Thomas [2007] NSWSC 844. [HB1] Thomas offered to sell a WWII plane on eBay and Smythe made the minimum (and only) bid of $150,000. Thomas then refused to sell the plane on the basis that there was no binding contract. Both Thomas and Smythe were registered eBay users and had accepted eBay’s terms & conditions by clicking the ‘accept’ button as part of their registration.
The court held there was a binding contract as eBay’s terms required a seller to complete the transaction to the highest bidder.
Browse wrap agreements
Unlike click thru or click wrap agreements, a user is not required to click on a box to say they have read and agreed to the terms & conditions (usually located somewhere on the website) prior to purchasing the goods or services. There is no mechanism for a user to indicate that they agree to the terms & conditions, so there can be no acceptance of those terms (a vital element of contract law) and as such the enforceability of the terms & conditions in these circumstances is uncertain.
Moving forward – Key lessons
Digital commerce is here to stay and if your business operates in that space don’t neglect your online terms and conditions. Ensure that:
1. A user is obliged to click on ‘I agree to the Terms & Conditions’- either with a hyperlink to those terms or the terms are set out in their entirety and the user is obliged to scroll through to the end and then accept – important this is done before any payment is made.
2. Your terms & conditions are easy to read, accessible and tailored to your business.
Click-wrap agreements are more likely to be enforceable where acceptance of the terms & conditions is a clear pre-condition to the purchase of the goods or services. The enforceability of the terms and conditions when not specifically drawn to the user’s attention is less clear cut.
Disclaimer:
Reliance on content the material distributed is general information only. The information supplied is not and is not intended to be, legal or other professional advice, nor should it be relied upon as such. You should seek legal or professional advice in relation to your specific situation.
Limited time offer from Active Law
ACS Queensland’s Preferred Legal Partner Active Law is extending their workplace relations offer of a 30-minute telephone consultation PLUS an employment 'health check' to assist employees to assess any concerns with their employment contracts for only $106 (plus GST). That’s 50% off their normal rate!
If you would like assistance with employment concerns, you can read more here.
This offers do not attract the further ACS member discount.
About the Author
Phillipa Hooper is a Senior Associate at Active Law, ACS Queensland’s Preferred Legal Partner. Phillipa has over 20 years of local and international experience across a diverse range of legal areas including business and commercial law, property and construction. Phillipa can assist with structuring, business acquisitions/sales, loan agreements, mortgages, IP/trademark issues, governance, and a range of commercial contracts.