In a decision that could significantly affect the enforceability of online contracts, the Massachusetts Appeals Court this week ruled that an email service cannot necessarily require its account users to litigate their claims in a distant forum. The case will have significant ramifications for all businesses that use website “terms of service” to regulate their relationships with customers.
The three-judge panel’s ruling upends a probate court’s 2011 decision that had rubber-stamped certain provisions buried in the lengthy terms and conditions posted on a “Yahoo!” website — provisions which, when printed out, stretched 10 single-spaced pages in length and contained no fewer than 25 numbered sections.
In a case of first impression, the Appeals Court declared that if you want a court to enforce the legal fine print on your website, you may have to prove that you “reasonably communicated” those contract terms to your users, and that the users unambiguously gave their assent.
In other words, for businesses that want to avoid prolonged litigation, “clickwrap” contracts are in. “Browsewrap” contracts are out.
Emailers Die. Emails Live On.
Tuesday’s ruling in Ajemian v. Yahoo! is the latest chapter in two siblings’ long-running battle to gain access to the contents of their deceased brother’s personal email account. While the decision does little to resolve the cutting-edge question at the heart of that case – who controls our social media accounts after we die? – it does provide practical guidance for how to write and present online terms and conditions in such a way that they will be enforced.
John Ajemian, struck by a motor vehicle, died tragically in 2006. His siblings asked Yahoo! for access to his emails so they could notify his friends and invite them to a memorial service. Yahoo! ultimately declined, citing its concern that federal law – the Stored Communications Act, which protects the privacy of online information – prohibited it from doing so.
The siblings were appointed administrators of their brother’s estate. In that role, they again asked Yahoo! for the emails, this time to assist them in identifying and locating their deceased brother’s assets. After prolonged negotiations, Yahoo! essentially agreed to disclose the names and email addresses of senders and recipients, along with dates and subject lines – but nothing more.
Finally, in 2009, the Ajemians sued, asking the Norfolk County Probate Court to declare that they were entitled to the emails themselves. Yahoo! responded by saying the court had no power to hear the case, because the Terms of Service on the Yahoo! website said, in Section 24, that all claims had to be brought within a year, and only to the courts of Santa Clara County, California.
Suddenly, what had started as a fight over post-mortem email privacy rights became a battle over whether Yahoo!’s website terms and conditions formed a legally enforceable contract. The probate court, in 2011, said yes. This week, the Appeals Court panel resoundingly disagreed. (As for the question of post-mortem ownership of social media accounts, stay tuned: The appellate panel directed the probate court to take up that issue next.)
Are the Website Terms a “Contract”?
As any first-year law student knows, an enforceable contract requires both “offer” and “acceptance.” The Appeals Court was unpersuaded that either had occurred in this case.
The court noted, first, that Yahoo! had not established that it had “reasonably communicated” the forum-selection and limitations provisions to its users. All Yahoo! told the court was that when registering for its service, “[p]rospective users are given an opportunity to review the Terms of Service and Privacy Policy.” That’s not enough, the Appeals Court said, reciting a litany of unanswered questions. Were the terms of service displayed on each user’s computer screen? Were they displayed in full? Or was the user merely directed to a hyperlink? If the latter, did Yahoo! clearly explain to users that only by clicking on the link would they know the exact terms of their contract with the email provider?
The Appeals Court was equally unconvinced that Mr. Ajemian, or anyone on his behalf, had manifested assent to Yahoo!’s terms and conditions. Citing federal court rulings from New York, Florida, Minnesota, as well as Massachusetts, the court said that forum-selection clauses were enforced “only where the record established that the terms of the agreement were displayed, at least in part, on the user’s computer screen and the user was required to signify his or her assent by clicking ‘I accept.’”
Such “clickwrap” agreements, the court said, will suffice to create a contract. However, a mere “browsewrap” agreement – where website terms and conditions are posted as a hyperlink at the bottom of the web page – is typically not enforced as a contract, because it’s not sufficiently clear that the user actually saw and “accepted” those provisions.
Even if the terms of service were deemed contractual, the appeals court added, it’s not clear that they would bind the administrators of Mr. Ajemian’s estate. “Yahoo! controlled the provisions” of the terms of service, the court said. “[I]t would have been a simple matter for it to define the parties to the contract to include estates, administrators, executors, successors and the like had that been Yahoo!’s intent.”
Practical Tips
A close reading of the appeals court’s decision in Ajemian suggests a variety of options for a business seeking to ensure that its website terms will be enforceable:
- If the terms and conditions are important, don’t hide them. Conspicuously display them, at least in part, on the user’s computer screen at the point of registration.
- Require that users scroll through the terms and conditions, to the end, before clicking “I accept.”
- If instead you provide a hyperlink to the terms, explicitly tell users that they must follow the link in order to understand the terms of their relationship with your business.
- Require an “unambiguous manifestation of assent” by the user.
- Make sure the terms bind not simply the “user,” but also his or her administrators, executors, successors, and assigns.
- If you include forum selection, limitations, and arbitration clauses, draft them as narrowly as possible to address your legitimate business interests.
- If you later amend your terms and conditions, offer a splash screen telling users about the changes, and requiring them to click through.
There is an inevitable tension between a business’s marketing instincts and its legal requirements. Too much “legalese” may get in the way of the user’s completing a transaction. Too little may leave the business vulnerable to customer misunderstandings or legal claims. The balance between the two is more art than science. That’s why wise businesses work closely with their legal counsel in the drafting and presentation of their terms of service and privacy policies.
If you have questions, please contact Robert A. Bertsche , a partner in Prince Lobel’s Media Practice. You can reach Rob at 617 456 8018 or [email protected].’