The E-Contracting Paradox: No One Reads Online Terms But Everyone Agrees to Them

Let’s face it, no one reads online terms and conditions. Admit it, you don’t read them either. I know you don’t, because I don’t. And I read user’s manuals (and file them). I never quit a book until I’m finished, no matter how bad the book is. I read the dust jacket, copyright page, table of contents, preface, introduction, footnotes and endnotes, bibliography, and often well into the index. And God help me if the first volume of a trilogy is a dud.

But I’m not likely to spend half an hour slogging through terms and conditions when I’m downloading software, paying my credit card bill, buying something on Amazon, or signing up for a social media service. But maybe I should….

Are You One of the Masses?

There are three types of online consumers: those who always read online terms (the exceptional and bored); those who click on the terms but don’t read more than a word or two (the formalists); and those who don’t bother to make even a token effort to find out what they might be agreeing to (the masses).

Why don’t people read online terms? Because it’s time consuming. Because it’s a take-it-or-leave-it proposition. And, for many, because they don’t think the terms are enforceable. Reading online terms takes too much time and the terms are non-negotiable, to be sure, but if you’re not reading them because you think there’s some wiggle room if things go south, you might want to think again.

Major v. McCallister

Here’s a case in point. A little over a year ago, a Missouri appellate court held a consumer to online terms although she hadn’t read them or even clicked on a link to load the terms onto her screen. Although courts in some jurisdictions might come to a different conclusion, the court’s decision in Major v. McCallister articulates the current law in Missouri.

Victoria Major, the plaintiff in the case, used ServiceMagic’s free web-based service to search for someone to remodel her Missouri home. When Major became dissatisfied with the work of the contractors she had located through the service, she sued the contractors and ServiceMagic in a Missouri state court. ServiceMagic moved to be dismissed from the case citing the Denver County, Colorado forum selection clause contained in their online terms and conditions.

The terms at issue were presented to Major through what’s commonly known as a browsewrap agreement. Major was presented with a button labeled “Submit for Matching Pros” after entering project and other information on several succeeding web pages. Each of the pages was hyperlinked to ServiceMagic’s terms. In addition, a blue hyperlink to the website terms with the notice “by submitting you agree to the terms of use” was positioned next to the “Submit” button. Major clicked on the button without ever having clicked through to the terms of use, which included the forum selection clause.

The appellate court applied traditional contract principles and upheld the trial court’s dismissal of ServiceMagic from the case. In reaching its decision the court determined that the hyperlink provided Major with notice of the online terms and that Major had assented to the terms by clicking on the “Submit” button, although she hadn’t actually read them.

So the next time you breeze past online terms thinking they probably won’t be binding, you might want to think again.

In Category: E-Contracting

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