Legal Issues

by Mike Masnick

Filed Under:
agreements, arbitration, browserwrap, eulas


Overstock Told That 'Browserwrap' Agreement Is Unenforceable

from the or-is-it? dept

It's still not entirely clear what online agreements are actually enforceable and which aren't. We've seen cases go both ways, with a recent ruling even noting that terms that are a hyperlink away, rather than on the agreement page itself, may be enforceable. But the latest case, involving online retailer Overstock went in the other direction. A court found that Overstock's arbitration requirement was unenforceable, because, as "browserwrap," the user was not adequately notified. Eventually, it seems that someone's going to have to make it clear what sorts of online terms are actually enforceable (if any). Until then, we're going to see a lot more lawsuits like this one.

Reader Comments (rss)

(Flattened / Threaded)

  1. icon
    HolaJohnny (profile), Sep 16th, 2009 @ 8:01pm

    What the... ?

    How has no one dropped a comment on this yet? It almost like the rest of you have lives... I don't know what those are but people tell me they have them.

    reply to this | link to this | view in thread ]

  2. identicon
    Anonymous Coward, Sep 16th, 2009 @ 8:39pm

    Need Comprehensive T&C

    I have an idea which could benefit consumers in multiple ways...

    Most people don't read the terms because it takes too long to read the entire agreement, assuming you even understand everything it says. The result - no one bothers to read them because it's too much of a burden. I propose that this type of burden is a kind of duress. You want to purchase something, but you dont want to spend an hour reading fine print in order to purchase it, what do you do? You end up saying that you read the terms even though you didn't.

    Companies should NOT be off the hook by forcing customers to be bound to terms they *obviously* didn't read. Even if there is a "link" or a "Check here that you have read our terms and conditions" checkbox, that should not be considered legal proof that someone actually read the terms because they will often say they read them due to duress. This is not simply a matter of a consumer being lazy and not willing to spend the extra time needed to read something, because even if they did spend the time to read the terms, most terms require a legal degree to fully understand every aspect of them. So, why should terms be binding when they are often written in ways that are impractical and often impossible for the typical person to fully understand?

    The technology exists to measure the amount of time someone is on a particular webpage. Proper proof that they read the terms should be based on the actual time the Terms where displayed in the user's browser without the user navigating to any other pages. If the time spent on the terms webpage is less then the time it would take for a typical person to read the entire terms, then that would indicate they *obviously* didn't read the terms, and accordingly the terms should not be binding on the consumer.

    Now imagine a website designed to not allow a person to complete the purchase if it was determined that they did not actually read the terms and agreement. The company would probably go out of business due to all the abandoned purchases!

    If the law would agree that terms should not be binding unless there is proof that the customer actually read the terms and simple didn't say they did due to duress, then websites will be FORCED to create more comprehensive and SHORTER terms to ensure customers will complete their purchase.

    Wow, what a world that would be, one with short and comprehensive Terms and Conditions ;)

    Just a thought.

    reply to this | link to this | view in thread ]

  3. identicon
    Anonymous Coward, Sep 16th, 2009 @ 8:51pm


    As a bonus, by being forced to produce short and comprehensive terms and conditions, this would result in people actually reading them, and thus could open new competitive opportunities for websites.

    For example, a website offering "Free shipping" will often effect which website you purchase from. By having shorter T&C, it will be more apparent that site "A" has a 30% restocking fee, while site "B" doesn't. So websites could actually take advantage of shorter T&C by promoting that they have better terms then the next guy.

    reply to this | link to this | view in thread ]

  4. identicon
    Anonymous Coward, Sep 16th, 2009 @ 8:58pm


    And to think of it, why is it that when I buy gas, or groceries or something at radio shack, there isn't a 4 page T&C contract on the back of the receipt?

    I'll tell you why because if people had to spend even 5 minutes reading the terms before they could purchase something, the stores would go out of business!

    reply to this | link to this | view in thread ]

  5. icon
    Chargone (profile), Sep 16th, 2009 @ 9:32pm

    Anonymous Coward, you're a genius!

    [wonder if anyone ever said that before? :D]

    reply to this | link to this | view in thread ]

  6. identicon
    scott, Sep 16th, 2009 @ 10:20pm

    Re: Need Comprehensive T&C

    about the only way to prove someone read something would be to have every word be on its own page in say 200 point font and make you click on each word before seeing the next. Actually, you'd have to do something like make the click spot somewhere random in the word itself so as to not be able to just sit and click the mouse w/o reading. Now, for a few thousand word agreement, it would take probably 15-30 minutes to "read". Then, as you say, no one would purchase from that company and they'd be forced to have an agreement like "you agree to not sue us if your stuff doesn't arrive".

    reply to this | link to this | view in thread ]

  7. icon
    Griff (profile), Sep 16th, 2009 @ 11:04pm

    Brown M&M's

    If you bury a strange clause somewhere in the T&C and incentivise them to find it, this might help people read T&C.

    For example, you get to the checkout page and the prices are all 10% higher than expected but there is is a box for "enter promotion code for 10% discount" and the promo code is buried in the T&C's...

    But it would better if T&C's were simpler, and consisted of a load of very simple statements that need to be individually accepted and which have legalese a click away if required.

    So something like this :

    1. You cannot copy this software and give it to someone else (click for details) [ ] I understand

    2. If the software screws up something, we aren't liable (details) [ ] I understand

    3. errrr... I can't remember any other obvious ones that really belong in such an agreement

    reply to this | link to this | view in thread ]

  8. identicon
    DS, Sep 17th, 2009 @ 4:16am

    Wait, the whole thing is because she was charged to return a vacuum cleaner? Shouldn't that have been in a returns policy, not a user agreement?

    reply to this | link to this | view in thread ]

  9. identicon
    Anonymous Coward, Sep 17th, 2009 @ 8:23am

    Re: Need Comprehensive T&C


    reply to this | link to this | view in thread ]

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