December 14, 2009

Your Association's Website Terms and Conditions May Be Unenforceable

4 min

Your association’s website likely has Terms and Conditions which govern a member’s or visitor’s rights with respect to the content of the website and/or the dealings with the association vis-à-vis the website.

Website Terms and Conditions may vary from a single page up to a 20-page document, and usually address many important legal issues, such as what uses a member (or third party) may make of the content, limitations of liability, warranties, jurisdiction, mandatory arbitration, copyright and trademark protection and resolution, and a host of other critical provisions. However, the fact that they are posted on your website does not mean that they will be legally enforceable.

There are generally two ways that people are deemed to have acquiesced or agreed to online Terms and Conditions. In one form of license, after the Terms and Conditions have been made available to a user, the user is presented with a button that says “I Agree” (or something comparable). Clicking on the “I Agree” button is a prerequisite to entering the website, participating in an activity provided by the website, visiting a “members-only” section of the website, or ordering a product. These are called “Click-Wrap licenses,” and generally speaking, they have been recognized by courts as binding agreements.

The other form of license, which is referred to as a “Browser-Wrap” agreement, is one in which the Terms and Conditions are available to members or other users if they click on a hyperlink that appears on the website. Clicking on the link is not required as a prerequisite for use of the site. The Browser-Wrap Terms and Conditions usually contain some language to the effect that by using and viewing this website, you agree to the Terms and Conditions. The Browser-Wrap variety of license is probably the most prevalent type of online license and is the one that is least likely to be upheld by a court. Why? Because most people do not scroll to the bottom of the page to even see that there is a Terms and Conditions link. Since they are not required to click on the link to use the site, download information, or participate in association activities, most users do not view it and thus have no notice of its terms. Also, users are not informed in any prominent place that the Terms and Conditions are of a binding nature.

Most associations bury the Terms and Conditions, as they believe that they will interfere with the experience of the member/viewer, that they are intrusive, or will turn off the member/viewer. While all of that may make sense from a marketing perspective, a Browser-Wrap agreement that is based simply on a hyperlink at the bottom of the first page of a website – no matter how comprehensive, well written and germane it is – in all likelihood will not be enforced by a court. A number of recent court cases reinforce this reality. Overstock.com lost its case because the user had neither actual nor constructive notice of Overstock’s Terms and Conditions because she was never was prompted to review the Terms and Conditions. In a case involving the downloading of software, the court failed to honor Netscape Communications’ Terms and Conditions because the link to them was not visible to the user. The link was at the very bottom of the page and the user left that screen from a link to buy the software that was located toward the top of the page. In the opinion, which was drafted by now-U.S. Supreme Court Justice Sonia Sotomayor, she stated, “…a reasonably prudent offeree in plaintiffs’ position would not have known or learned, prior to acting on the invitation to download, of the reference to [the software’s] license terms hidden below the ‘Download’ button on the next screen.”

That being said, there are a number of steps that can be taken by an association to make its Browser-Wrap Terms and Conditions more likely to be enforceable. They are relatively simple to undertake and are based on common sense. However, they require a properly-designed website.

This is one instance in which, if an association wants to enjoy the legal benefit of its website Terms and Conditions, the legal requirements must trump other considerations.


Joshua Kaufman is a partner at the Venable LLP law firm and is chair of its Copyright and Licensing Group. Based in Venable’s Washington, DC office, he is a widely-published author and an Adjunct Professor at American University Law School. For more information, he can be reached at 202.344.8538 or [email protected].