Terms of Use Enforceable?

Today, nearly all successful businesses have websites. As part of the process of building a website, most companies hire an attorney experienced in contracts and business law to draft "Terms of Use" that govern the relationship between the company and any users of its website. These Terms can be extremely important, and can govern everything about the conduct of the user on the website such as IP ownership clauses and licenses, as well as limitations on damages, forum selection clauses, mandatory arbitration, and class waivers in the event of a legal dispute or lawsuit between the parties.

How these contract provisions are presented has a significant impact on whether it is enforceable. There are two types of website licenses, browser licenses and click licenses. In a "browser license" a link to the Terms is typically displayed at the bottom of each webpage. A user is free to visit numerous pages on the website without ever having to visit the page with the Terms. While an attorney experienced in business law may have drafted Terms that are exactly what the business wanted, if they aren't enforceable your business may not be protected to the extent you think it is.

In a "click license" a user must affirmatively indicate that he or she agrees to the contract terms provided by clicking "I Agree" or something substantially similar on the website. While the contract language need not be all on the same page, it should be easily accessible via a prominent hyperlink near the affirmation button. Courts have been nearly universal in accepting such terms as creating a binding contract. Whether a user reads the Terms is largely irrelevant.

Clearly, if you want to have your Terms constitute a binding contract, you should contact attorneys experienced in business law and contracts. Contact the lawyers at Clausen & Centrich for more information.

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