Website terms of use unenforceable.
Website terms were unenforceable because a provision on the right to change them in future was unqualified, a US court has ruled. Existing terms were 'illusory' because of the threat that future changes could apply retroactively, the court found.
A woman is suing video rental firm Blockbuster but the company said that its online terms and conditions require all disputes to be settled by arbitration. The woman, Cathryn Harris, went to court and won a ruling which said that the terms and conditions could not apply.
Harris is a customer of BlockbusterÂs online rental service who uses social networking site Facebook. Facebook's ill-fated advertising system Beacon broadcast Harris's video rental activity to her Facebook friends. Harris objected and sued Blockbuster for passing on the details, but Blockbuster said that the suit breached the terms and conditions to which she agreed when she joined Blockbuster Online.
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The US District Court for the Northern District of Texas has said, though, that Blockbuster cannot rely on any of its terms and conditions because a clause allowing it to alter them creates too much uncertainty for customers.
The terms said that Blockbuster could vary them at any time without giving notice, and that modifications would be effective upon being posted. They added: ÂYou agree to review these Terms and Conditions of Use periodically and your continued use of this Site following such modifications will indicate your acceptance of these modified Terms and Conditions of Use. If you do not agree to any modification of these Terms and Conditions of Use, you must immediately stop using this Site.
The Court looked at a previous case in which Halliburton was allowed to keep its arbitration clauses because they specifically said that terms and conditions amendments could not apply retrospectively to pre-existing disputes.
"The Court concludes that the Blockbuster arbitration provision is illusory," said the judge, Barbara Lynn. "There is nothing in the Terms and Conditions that prevents Blockbuster from unilaterally changing any part of the contract other than providing that such changes will not take effect until posted on the website."
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Makes sense. If they want to treat web site "terms of service" like a contract, then it needs to have fixed terms like a written contract.
They can't have it both ways.
Cheers,
Scott.