Are Website Terms of Service Legally Binding?

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Are Website Terms of Service Legally Binding?

The terms of service set forth on a company’s website can be legally binding if they meet the elements that create an enforceable contract and are presented to a user for review and acceptance in a way that meets approved standards.

Prior to using a website, users must typically consent to the terms and conditions set forth on the website’s Terms of Service (ToS) page. A contract between the owner of the website and the user is created once the user agrees to those terms and conditions. To be legally binding, the Terms of Service must be presented to users through one of the following methods:

  • Clickwrap agreement — requires the user to click a button that represents their acceptance of the website’s Terms of Service prior to using the site. The courts typically prefer this method since it requires a user to take a specific action to indicate acceptance — i.e., there is both an offer and an acceptance.
  • Browsewrap agreement — a notice displayed on the website that informs the user that their use of the website connotes acceptance of the Terms of Service. While this method may be on its face more user friendly, it is harder for website owners to defend because there is no clear offer and acceptance.

Other factors that courts may take into consideration when determining the legality of ToS agreements include:

  • Notice — users must be given sufficient time to review the ToS agreement without the site “timing out” too quickly. This equates to insufficient notice.
  • Available and conspicuous — the ToS agreement must be obviously displayed to the user and not buried in the site’s footer or other inconspicuous location. If there is a hyperlink to the ToS agreement buried deep in the site, the courts have found this to be insufficient notice to the user that he or she is agreeing to the ToS terms.
  • Clear — using the “reasonable person” standard, it must be made clear to the user that he or she has accepted the ToS agreement.

In addition, the ToS agreement cannot contain a unilateral provision that allows the website owner to make any changes to the agreement without notifying the user.

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