- Protect the intellectual property included on or accessed through the site. One example of this is to prohibit the unauthorized reproduction of material contained on the site.
- Ensure the site is not used in ways that may be harmful, including by prohibiting illegal or undesirable user behavior. Examples include:
- using the site for illegal purposes;
- introducing viruses; and
- uploading illegal, infringing, or defamatory content.
Courts have generally found that obtaining user assent to terms through a click-through agreement creates an enforceable contract. Site owners using this method also typically include a link to the terms on the homepage. Additionally, sites sometimes include a link to other pages of the site for easy reference by users.
- A letter from the site owner.
- A prominent notice on the site stating that use of the site constitutes agreement to the terms.
Nevertheless, when there is no evidence of actual notice, enforceability turns on whether the user was put on inquiry notice. The courts have set the bar high for inquiry notice.
- The terms were only accessible through a link at the bottom of the homepage.
The Second Circuit has similarly held an arbitration clause unenforceable where the online service provider sent it to consumers in a follow-up, either through a hyperlink or in the body of the email, after they enrolled in the provider’s service.
- Make a purchase on an e-commerce site.
- Upload or post content using social media.
Click-Through Method Enforceability
When using a click-through method, to increase the likelihood of enforceability:
- Include a prominent statement on or next to the applicable button or check box stating that the user has read and agrees to the terms.
If a website permits users to post content, the website owner should determine if it is eligible for and, if eligible, take steps to ensure it complies with the requirements of the safe harbors that protect online service providers under the:
- Digital Millennium Copyright Act of 1998 (DMCA) for copyright infringement resulting from acts of third-party users.
- Section 230 of the Communications Decency Act (CDA) for defamation and certain other torts resulting from statements published by third-party users.
Potential Class Actions Under New Jersey Consumer Protection Law
Site owners should be aware of the spate of class actions under New Jersey’s Truth-in-Consumer Contract, Warranty, and Notice Act (TCCWNA). The TCCWNA covers e-commerce terms and conditions for transactions or potential transactions with New Jersey consumers. Even if New Jersey law does not govern the terms and conditions, the TCCWNA still applies. Several pending cases also argue that the TCCWNA should extend to sites that are not clearly e-commerce sites.
The TCCWNA prohibits the inclusion of contractual terms that:
- Violate any clearly established:
- state or federal legal right of a consumer; or
- responsibility of a seller, lessor, creditor, lender, or bailee.
- Waive the consumer’s rights under the TCCWNA.
- Contain broad savings clauses (such as “void where prohibited”). These clauses do not specify which provisions are void, unenforceable, or inapplicable in New Jersey. This prohibition against blanket savings clauses does not apply to written warranties.
Recent litigation provides a few examples of standard terms that may violate the TCCWNA, including provisions that:
- Waive a consumer’s rights to attorneys’ fees or require the consumer to split litigation costs.
- Limit a business’ liability for personal injury or property damage that occurs on its premises.
- Indemnify a business against losses that occur due to its own negligence or recklessness.
- The site owner does not conduct e-commerce or otherwise charge users for access to the site or any information or services offered on the site. To the extent the site charges for access to certain services or conducts e-commerce activities, additional terms are necessary to set out how goods or services will be sold (dealing with, among other things, contractual procedures for placing and accepting orders, payment terms, risk of loss, delivery, cancellations, and refunds).
- The website is intended for and is primarily used by US users. If the website operates in more than one jurisdiction or is used by many non-US users, the site owner must determine whether it is subject to the laws of any foreign jurisdictions and, if so, take steps to comply with those jurisdictions’ laws. For example, consider whether the European Union General Data Protection Regulation applies to the website.
- The website includes or will include basic interactive features, including allowing users to upload, post, or transmit user-generated content.
- Easy to read and understand by intended users of the site.
- Reviewed periodically and updated as necessary to reflect any changes in legal requirements, new features, or other changes to the site.
Important Legal Disclaimers
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