If customers use your website or online service or app, you need to have enforceable terms and conditions. That way, if there is some dispute, you can control over how it’s resolved,. You can also contain the costs by putting an arbitration clause in the terms and conditions. Instead of an expensive lawsuit, you can resolve it in arbitration which is often less expensive, quicker, and more private.
For terms and conditions to be enforceable, one must prove that the customer actually agreed to them. You’d be surprised how often companies find themselves in the expensive hassle of fighting over whether their terms are enforceable, then finding out they’re not. This can cause them to miss out on the cost savings and efficiency of arbitration.
This happened just just this week. A federal court of appeals ruled that an app developer didn’t structure the interface in a way to put users on notice of the terms. So since the developer couldn’t prove the users saw the terms, the case will proceed in court instead of arbitration.
And perhaps even worse, the case will probably move forward as a class action. Had the terms been enforceable, it would probably have just been limited to one-on-one lawsuits. That would have been much better for the developer.
If you’d like to discuss your terms and conditions, drop me a line or give me a call.
Benson v. Double Down Interactive, LLC, 2020 WL 468422 (9th Cir. January 29, 2020)
About the author:Evan Brown is a technology and intellectual property attorney in Chicago. Follow him on Twitter and Instagram, connect on LinkedIn and subscribe to his YouTube channel for videos on interesting topics about law and technology.