Web Contracts Can't Be Changed Without Notice

RZG writes "The U.S. Court of Appeals for the Ninth Circuit ruled on July 18th that contracts posted online cannot be updated without notifying users (PDF of ruling). 'Parties to a contract have no obligation to check the terms on a periodic basis to learn whether they have been changed by the other side,' the court wrote. This ruling has consequences for many online businesses, which took for granted their right to do this (see for example item 19 in Google's Terms of Service)."

Comments

Not a big issue

[MysteriousPreacher]

Well, it's not a big issue for sites that require a login. All they have to do is flash up the new terms for the users next time they log-in. World of Warcraft does this during patching if the licence has changed. WoW isn't a web site but the principle is the same.

Any site that would change its terms without some kind of notice to users has been operating in cowboy land anyway.

Kind of sad

[CastrTroy]

It's kind of sad that something like this has to be decided in court, and isn't actually just common sense. I can't have someone sign a paper contract, and then go and change everything around, and them make them bound to said contract. I don't know why anybody would think an online contract would be any different. The whole idea of changing a contract after someone has already agreed it is ludicrous.

Re:Kind of sad

[CastrTroy]

The point is, is that these companies are not being fair about the renegotiations. There are actually no negotiations going on at all. They just change the contract, tell you if you don't like it, you can leave, and you may not even have any idea that we've changed the contract until it's too late. You're landlord can't just come to you 6 months after you've signed the lease, and take away your stove, fridge, and dishwashers, and say, sorry, we changed the terms of this contract, and you're not entitled to that stuff anymore. If you don't like it, you can leave. Oh, but you now have to give us 4 months warning before moving out, or you'll be held accountable for the extra rent.

An agreement to agree is not an agreement

[Animats]

This is a sound decision. There's a classic principle of English common law that says "an agreement to agree is not an agreement at all". A contract to agree to terms not yet defined is not an enforceable contract. This is standard contract law.

The actual decision says:

Parties to a contract have no obligation to check the terms on a periodic basis to learn whether they have been changed by the other side. Indeed, a party can't unilaterally change the terms of a contract; it must obtain the other party's consent before doing so. Union Pac. R.R. v. Chi., Milwaukee, St. Paul & Pac. R.R., 549 F.2d 114, 118 (9th Cir. 1976). This is because a revised contract is merely an offer and does not bind the parties until it is accepted. Matanuska Valley Farmers Cooperating Ass'n v. Monaghan, 188 F.2d 906, 909 (9th Cir. 1951). And generally "an offeree cannot actually assent to an offer unless he knows of its existence." Samuel Williston & Richard A. Lord, A Treatise on the Law of Contracts 4:13, at 365 (4th ed. 1990); see also Trimble v. N.Y. Life Ins. Co., 255 N.Y.S. 292, 297 (App. Div. 1932) ("An offer may not be accepted until it is made and brought to the attention of the one accepting."). Even if Douglas's continued use of Talk America's service could be considered assent, such assent can only be inferred after he received proper notice of the proposed changes.

Companies have been trying to get away with something that has no basis in law. Finally, someone sued on that issue, and won.

The Register points out that this is consistent with UK law. That's not surprising. This goes back to ancient common-law traditions. The Register also points out that the issue of whether terms can be changed when the consumer has an ongoing obligation to the seller (like a cell phone service agreement) has been argued in Britain and decided in favor of consumers.