Web Law Alert re Privacy Policy & TOS

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Dear Friends:

I am a lawyer with a practice limited to Internet law. I have sent the following alert to my clients for their consideration and I thought this information may be of use to my Warrior friends:

There has been a change in the way courts view and enforce the Terms of Service (TOS) and Privacy Policy (PP) of web sites. Previously, the courts have taken the view that a link to your PP or TOS will create an enforceable contract (called a "browser wrap" agreement.) This view was affirmed by then Judge and now Justice Sotomayor in her decision in Specht v. Netscape Communications Corp.

However, on September 4, 2009, Judge Sterling Johnson of the Eastern District of New York changed that view with his decision in the case of Hines v. Overstock.com. In his decision, Judge Johnson has taken the view that merely saying that by using a web site you have agreed to its terms does not mean that the user has had reasonable notice to those terms. His view was that for the PP and TOS to be enforceable, the site user needs to indicate his acceptance of these terms by a manifestation of assent. It is my belief that this decision changes the previous law of "browser wrap" to a new level, the "click wrap" (i.e. the user clicks his consent.)

While the opinion of Judge Johnson is not binding on all courts, I am of the belief that it will be embraced throughout the court system. His decision reminds me of the decision in Parker v South Eastern Railway, an English case from 1877, which every first year lawyer learns in their Contracts class. In that case, the jury decided that it is NOT reasonable to expect people to read the "contract" on the back of a railroad ticket. This case has never been overturned and is the law in the U.S., having been used as the precedent and cited in case law to include the back of movie tickets, parking lot receipts, coat check receipts, etc. Given this old precedent, I think the Hines case will quickly become the law of the land with lawyers arguing a browser wrap contract is no different than the back of a movie ticket.

My recommendation: To make sure your users have constructive notice of the terms contained in your PP and TOS I strongly recommend that you use an "I agree" click button on your web site for your PP & TOS when your users register and (if a commercial site) again during the ordering process.

Please feel free to call me if you have any questions concerning my view of how your web site should function. I will be glad to discuss this issue as a free consultation.
#alert #law #policy #privacy #tos #web

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