Mark Pestronk
Q: Two years ago, you wrote a column called "Two requirements to make online terms and conditions binding," and you stated that, if we want clients to be bound by the terms and conditions on our website, we have to "give the client actual notice of the terms and conditions ... [and] give the client opportunity to read the terms and conditions before the client is bound." Is this still the law, or is more than notice and opportunity required?
A: If other courts follow a new, well-reasoned 83-page opinion that respected Federal Judge Jack Weinstein in Brooklyn issued last month, it will no longer be enough to give some actual notice of the existence of your terms and conditions. You will need to do more. Faithful readers of "Legal Briefs" know that I am obsessed with the question of how online terms and conditions can bind website users, and why courts consistently uphold these obnoxious clauses even though there is no evidence that the users agreed to be bound. Egregiously anticonsumer clauses seem particularly prevalent in public travel booking websites, where suppliers generally disclaim liability for whatever goes wrong on the trip.
In Berkson v. GoGo (the inflight WiFi company), Weinstein introduced a new, four-part test for determining whether a consumer is bound:
"1) [I]s there substantial evidence from the website that the user was aware that she was binding herself to more than an offer of services or goods in exchange for money?
"2) Did the design and content of the website, including the homepage, make the 'terms of use' (i.e., the contract details) readily and obviously available to the user?
"3) Was the importance of the details of the contract obscured or minimized by the physical manifestation of assent expected of a consumer seeking to purchase or subscribe to a service or product?
"4) Did the merchant clearly draw the consumer's attention to material terms that would alter what a reasonable consumer would understand to be her default rights when initiating an online consumer transaction from the consumer's state of residence: the right to...bring a civil consumer protection action under the law of her state of residence and in the courts in her state of residence; and participate in a class or collective action?"
So an online merchant, including any travel supplier, must conspicuously call the consumer's attention to the existence of terms and conditions, must make the terms and conditions readily and obviously available, must not obscure the importance of the fine print and must draw special attention to clauses such as exclusive jurisdiction in distant states and waiver of class-action rights.
All four of these tests add up to a kind of "super notice" requirement. The judge cited the wording of the hard copy of Carnival's cruise ticket as the kind of notice that would pass muster, as the ticket "announced its terms by 1) using the word 'contract' twice; 2) addressing the reader in all caps; 3) indicating where to find the contract; and 4) inserting the word 'important' and the phrase 'please read.'" Although you do not have to revamp your website right now to provide "super notice," I predict that Weinstein's opinion will be widely followed by many courts in the coming years.